Simplified $5 per square foot or the actual-expense method, side by side
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 29 Sept 2026.The simplified home office method allows $5 per square foot of office, up to 300 square feet, so at most $1,500. The regular method deducts the office's share of rent or mortgage interest, taxes, insurance, utilities, repairs and depreciation. Both are limited to your business income. Employees on a W-2 cannot claim either.
Rates and rules read from the sources listed on this page (the earliest on 29 Sept 2026); they may have changed since.
Enter the Office area, used only for business, and the Whole home area in square feet.
Enter your Business income before this deduction.
For the regular method, fill in the year's mortgage interest or rent, utilities, insurance and repairs.
Read the Best deduction, comparing the simplified and regular methods; the rates are from IRS Publication 587, listed under Sources.
If you are self-employed and use part of your home regularly and only for your business, you can deduct part of the cost of that home. The IRS offers two ways to work it out, and this calculator runs both on your figures so you can pick the larger one.
Simplified method. Multiply the office area by $5, using no more than 300 square feet. A 200 square foot office gives $1,000; the most anyone can take is $1,500. There is no depreciation, no Form 8829 and no records of home expenses beyond the area. Your full mortgage interest and property taxes stay on Schedule A if you itemize.
Regular method. Divide the office area by the home's total area to get the business percentage. Apply it to the home's indirect costs: mortgage interest, real estate taxes, rent, insurance, utilities, repairs and upkeep. Add direct costs spent only on the office. Owners also depreciate the business share of the building, not the land, at 2.564% a year after the first year. The result goes on Form 8829.
The income limit. Neither method can create a loss. The deduction stops at your business income less your other business expenses. Under the regular method, mortgage interest and taxes are allowed first, then operating costs, then depreciation, and anything cut off carries forward to next year. The simplified method has no carryover.
Employees. Workers paid on a W-2 cannot deduct a home office, even when working from home at the employer's request, because miscellaneous itemized deductions were eliminated from 2018. Armed Forces reservists, qualified performing artists and fee-basis government officials are the exceptions.
What it does not do. It does not test the exclusive-use rule, handle daycare use by hours, or bring in a carryover from last year. In the first year of use, depreciation is lower than 2.564% and depends on the month. An estimate, not tax advice.
The regular method usually wins for homeowners with a mortgage, taxes and a sizeable office, because it adds depreciation and a share of every home cost. The simplified method often wins for renters with low rent or a small office, and it needs far less paperwork. The calculator runs both and names the larger.
Publication 587 sets it at $5 per square foot of the area used for business, counting no more than 300 square feet. The maximum is therefore $1,500 a year. A 150 square foot office gives $750. The deduction still cannot be more than the business income it comes from.
No. Section 67(h) eliminated miscellaneous itemized deductions, including unreimbursed employee expenses, for tax years after 2017. Working from home for an employer does not change that. Only Armed Forces reservists, qualified performing artists, fee-basis state or local officials and employees with impairment-related work expenses can still claim employee expenses.
Divide the area used only and regularly for business by the total area of the home. A 200 square foot office in a 2,000 square foot home is 10%. That percentage applies to indirect expenses, those for the whole home, while direct expenses for the office alone are deducted in full.
No. Both methods stop at the gross income from the business use of the home, less your other business expenses. Under the regular method the excess operating expenses and depreciation carry forward to the next year. Under the simplified method anything above the limit is simply lost.
Yes. Depreciation claimed on a home office after May 6, 1997 cannot be excluded when you sell the home, even if the rest of the gain is tax-free under section 121. It is taxed at up to 25%. The simplified method claims no depreciation, which avoids this later tax.
Rates and rules change; check the source before you rely on a figure.
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