Home office deduction calculator
There are two ways to claim a home office and they can differ by thousands. This works out both from your actual figures and tells you which one wins.
Deduction you can claim
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Enter your office and home square footage to compare the two methods.
- Simplified method
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- Regular method
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- Business share of home
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- Tax saved
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How this is worked out
The simplified method multiplies your office's square footage by $5, up to 300 square feet. That caps it at $1,500 a year however large the room is, and there is nothing else to track.
The regular method works out what share of your home the office takes up (office square feet divided by total square feet) and applies that percentage to your real housing costs: rent or mortgage interest, utilities, insurance, repairs, property tax and depreciation. A 150 sq ft office in a 1,200 sq ft apartment is 12.5% of the home. On $24,000 of rent, $2,400 of utilities and $300 of renters insurance, that is a $3,338 deduction, against $750 from the simplified method.
The tax saving shown is the larger deduction multiplied by a combined rate. If you are self-employed, each dollar of deduction saves roughly 14.1 cents of self-employment tax, which is charged on 92.35% of profit at 15.3%. It also saves income tax, but at a little less than your bracket rate: a lower profit shrinks the deduction for half of your self-employment tax and, if you get it, the 20% QBI deduction, so only about 74% of the deduction comes off your taxable income. At the 22% bracket that is about 30.5% in all, so the $3,338 regular-method deduction above is worth about $1,017.
Two limits the calculator does not apply. First, neither method can take your business below zero: the deduction is capped at the gross income from the business use of your home. Under the regular method the excess carries forward to next year, while under the simplified method it is lost. Second, if you own your home, depreciation you claim reduces your cost basis and can be taxed as recapture when you sell. The simplified method avoids that entirely.
Whichever method you choose, the space has to be used regularly and exclusively for business. You can switch methods from one year to the next.
Sources
Common questions
What is the simplified home office deduction?
A flat $5 per square foot of office space, capped at 300 square feet — so a maximum of $1,500. No receipts, no depreciation, no tracking of household bills.
Which home office method should I use?
Whichever gives the larger deduction, which usually means the regular method if your rent or mortgage interest is high or your office is over 300 square feet. The simplified method wins on paperwork and avoids depreciation recapture when you sell.
Does a home office have to be a separate room?
Not a separate room, but it does have to be used regularly and exclusively for business. A desk in a spare bedroom that doubles as a guest room fails the exclusive-use test.
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Estimates based on published federal rules for tax year 2026. State and local tax is not included. This is general information, not advice about your situation.