Home Office Deduction Calculator

Compare the simplified and regular home office deduction methods and see which gives you the bigger deduction this year.

By Thomas P. Checked against IRS Publication 587 & Form 8829 Updated

Your space

Your bigger deduction

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Best method: —

Simplified method ($5 / sq ft, max 300)
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Regular method (business % of costs)
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Business-use percentage
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Estimate for information only — not tax, legal or financial advice. Federal figures for tax year 2026; state and local taxes are not included unless you enter them. Check your situation with a CPA or enrolled agent.

Who can claim the home office deduction

If you are self-employed and use part of your home for business, you can deduct some of the cost of that home. Two tests must both be met:

  • Regular and exclusive use. The space is used only for business, on a regular basis. A desk in the corner of the living room used for both work and family does not qualify; a spare room used only as an office does.
  • Principal place of business (or a place where you regularly meet clients). Doing your administrative work there counts if you have no other fixed location for it.

Employees who work from home for an employer generally cannot take this deduction under current federal law. It is for the self-employed.

Two methods

Simplified method Regular method
How it’s figured $5 × office square feet Business-use % × actual home costs
Limit 300 sq ft ($1,500 max) Up to your business profit
Records Square footage only Receipts for every expense
Form Schedule C Form 8829
Depreciation (owners) None Yes, recaptured when you sell
Example — a 150 sq ft office in a 1,500 sq ft rented apartment.
Business use: 150 ÷ 1,500 = 10%.
Simplified: 150 × $5 = $750.
Regular: 10% × ($24,000 rent + $4,800 utilities and insurance) = $2,880.
Here the regular method gives almost four times the deduction.

Which method should you use?

The simplified method is quick and safe for small spaces or low-cost homes. The regular method usually wins when housing costs are high, especially for renters, who deduct a share of rent with no depreciation to recapture later. Homeowners should weigh the bigger deduction against depreciation recapture when they sell. You can switch methods from year to year.

What counts as home expenses

  • Rent, or mortgage interest and property tax if you own
  • Utilities: electricity, heat, water, trash
  • Homeowner’s or renter’s insurance
  • General repairs and maintenance for the whole home
  • Depreciation of the home (owners, regular method only)

Repairs only to the office itself (painting that room, for example) are fully deductible as direct expenses under the regular method.

How much tax it saves

The deduction reduces your business profit, which lowers both self-employment tax and income tax. In the 12% bracket, each $1,000 of deduction saves roughly $230 of federal tax combined (about $141 of self-employment tax and $89 of income tax, after the smaller QBI deduction).

Frequently asked questions

Can the deduction create a loss?

No. It is limited to the profit from the business that uses the office. Under the regular method, unused amounts carry forward to future years.

Can I deduct my internet and phone?

Yes, but separately: deduct the business-use share of internet and phone as regular business expenses, not as part of the home office.