Home Office Deduction
The IRS allows self-employed people to deduct home office costs if they use part of their home regularly and exclusively for business. There are two methods: the simplified method ($5/sq ft, up to 300 sq ft = $1,500 max) and the actual expense method (proportional share of rent, utilities, internet, depreciation). Our calculator computes both and shows which gives you the larger deduction.
Dépenses annuelles du logement
Meilleure déduction
Office sqft × $5 (max $1,500)
Business use % × total expenses
Simplified vs. Regular Method: Which Should You Use?
The IRS offers two ways to calculate your home office deduction. The Simplified Method multiplies your office square footage by $5, up to a maximum of 300 square feet ($1,500 maximum deduction). It requires no tracking of actual expenses and cannot produce a loss.
The Regular Method calculates your business-use percentage (office square feet divided by total home square feet) and applies that percentage to all qualifying home expenses — rent or mortgage interest, utilities, insurance, and repairs. This method requires more record-keeping but typically produces a larger deduction, especially if you have high housing costs.
This calculator compares both methods automatically and highlights the larger result. Keep in mind that you can switch methods from year to year — there is no requirement to use the same method every tax year. Choose whichever produces the highest deduction for each filing year.
What Expenses Qualify for the Home Office Deduction?
To qualify for the home office deduction, your workspace must be used regularly and exclusively for business — a dedicated room or defined area of your home that is not used for personal activities. The deduction is available to self-employed individuals and freelancers who file Schedule C.
Under the Regular Method, qualifying direct expenses include rent or the mortgage interest portion of your payment (not principal), utilities such as electricity, gas, and internet, homeowner's or renter's insurance, and repairs or maintenance that affect the whole home. Expenses that only affect your office — like painting just that room — can be deducted in full rather than prorated.
W-2 employees working from home are generally not eligible to claim the home office deduction under current tax law — this changed after the 2017 Tax Cuts and Jobs Act. Only self-employed individuals, independent contractors, and small business owners can take advantage of this deduction.
À propos de Home Office Deduction Calculator
The IRS allows self-employed people to deduct home office costs if they use part of their home regularly and exclusively for business. There are two methods: the simplified method ($5/sq ft, up to 300 sq ft = $1,500 max) and the actual expense method (proportional share of rent, utilities, internet, depreciation). Our calculator computes both and shows which gives you the larger deduction.
Comment l'utiliser
- Enter your office square footage and total home square footage.
- Enter annual home costs: rent or mortgage interest, utilities, internet, insurance, repairs.
- The calculator shows the simplified deduction and the actual expense deduction side by side.
- Claim whichever is higher on Schedule C (Form 8829 for actual method).
Formule et méthodologie
Simplified: Deduction = Office sq ft × $5 (max $1,500). Actual: Business use % = Office sq ft / Total sq ft. Deduction = Business use % × (Rent + Utilities + Internet + Insurance + Repairs) + Depreciation allocation.
Cas d'usage courants
- Maximizing the home office deduction on Schedule C
- Comparing simplified vs actual methods before filing
- Estimating deductions when setting up a dedicated home office
- Calculating the deduction impact on quarterly estimated taxes
- Understanding eligibility requirements before claiming
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