Home Office Deduction Calculator
Calculate your home office tax deduction using the IRS simplified method ($5/sq ft) or the regular method (actual expenses). Compare both to see which saves you more on your Schedule C.
Business use: 0.0% of home
Simplified Method
$1,000200 sq ft x $5/sq ft
Regular Method
Enter expensesRecommended
$1,000Simplified method
Enter your annual home expenses to compare the regular method. Only the business-use percentage (0.0%) is deductible.
Electric, gas, water, internet
Who qualifies?
- Self-employed, freelancers, and independent contractors (Schedule C filers)
- The space must be used regularly and exclusively for business
- Must be your principal place of business, or where you regularly meet clients
- W-2 employees cannot claim this deduction (suspended by TCJA through 2025)
The simplified method allows $5 per square foot of home office space, up to 300 square feet ($1,500 maximum). The regular method deducts actual expenses proportional to your office's percentage of total home area. You can switch methods from year to year. See IRS Publication 587 for full details.
How the Home Office Deduction Works
The home office deduction lets self-employed individuals deduct expenses for the portion of their home used regularly and exclusively for business. There are two methods:
Simplified method: $5 per square foot of dedicated office space, up to 300 sq ft. Maximum deduction: $1,500. No expense tracking or depreciation needed.
Regular method: Calculate the actual expenses of running your home (rent/mortgage interest, utilities, insurance, repairs, depreciation) and deduct the business-use percentage. Can yield a larger deduction but requires detailed records.
You can switch between methods from year to year. The simplified method is Form 8829-EZ; the regular method uses the full Form 8829.
Frequently asked questions
What is the simplified home office deduction?
The simplified method allows you to deduct $5 per square foot of your home office, up to a maximum of 300 square feet. That's a maximum deduction of $1,500 per year. No need to track actual expenses or calculate depreciation — just measure your office space.
Simplified vs regular method: which is better?
The regular method is usually better if your actual home expenses are high (expensive rent or mortgage, high utilities) or your office takes up a large percentage of your home. The simplified method is better for smaller offices in modest homes, and it avoids the complexity of tracking expenses and depreciation recapture when you sell. You can switch methods each year.
Can W-2 employees claim the home office deduction?
No. Under current federal law (the Tax Cuts and Jobs Act), W-2 employees cannot deduct home office expenses, even if they work from home full-time. This deduction is only available to self-employed individuals, freelancers, and independent contractors who file Schedule C. Some states (like New York) allow a state-level deduction for employees.
What is the 'exclusive use' requirement?
To claim the home office deduction, the space must be used regularly and exclusively for business. A desk in a corner of your bedroom can qualify if that area is used only for work. A kitchen table you also eat dinner at does not qualify. The space must also be your principal place of business or a place where you regularly meet clients.
What expenses can I deduct with the regular method?
The regular method lets you deduct the business-use percentage of: mortgage interest or rent, property taxes, utilities (electric, gas, water, internet), homeowner's or renter's insurance, repairs and maintenance, and depreciation (for owned homes). Only the portion attributable to your office space is deductible.
What is depreciation recapture on a home office?
If you use the regular method and claim depreciation on your home office, the IRS requires you to 'recapture' that depreciation when you sell your home. The depreciation amount is taxed at up to 25% as unrecaptured Section 1250 gain, even if the rest of your home sale is tax-free under the $250K/$500K exclusion. The simplified method avoids this entirely.