Home Office Deduction Calculator

Office square feet (used only for business) Total home square feet Yearly home costs for the regular method Add up rent or mortgage interest, property tax, utilities, homeowners or renters insurance, and repairs for the whole home.

More details

This calculator doesn't figure depreciation for owners, and it treats all costs as whole-home (indirect) costs. Costs only for the office itself (like painting it) count 100%. See Pub. 587.

Business profit before the home office deduction Your business income minus your other business expenses. The home office deduction can't go above this. Show my math

Simplified vs regular: the trade-offs

• Simplified: $5 × up to 300 sq ft (max $1,500). No expense tracking, no depreciation, no depreciation recapture when you sell. Mortgage interest and property tax stay fully on Schedule A if you itemize. Any amount over your profit limit is lost, not carried over.
• Regular: business-use % × actual home costs, plus depreciation if you own. More records (Form 8829). Amounts over the limit can carry over to next year.
• You can pick either method each year.

IRS simplified option · IRS Pub. 587

Limits to know

• Regular and exclusive use. The space must be used only for business, on a regular basis. Daycare and inventory storage have exceptions.
• Principal place of business (or a place you regularly meet clients) is generally required.
• Can't exceed business profit. The deduction is capped at the gross income from the business use of your home minus your other business expenses.
• W-2 employees generally can't take this deduction on their federal return.
• A deduction isn't a refund. It lowers taxable profit. Your savings depend on your tax rates.

FAQ

What's the most the simplified method allows?
$1,500 a year: $5 × 300 sq ft.

Can the deduction create a loss?
No. It's capped at your business profit. Under the regular method the extra carries over; under the simplified method it doesn't.

Does a corner of my living room count?
Only if that space is used regularly and only for your business.

Is this tax advice?
No. It's a general-education estimate. Check with a qualified tax professional about your situation.