Home Office Deduction Calculator

Compare the two IRS methods side by side and see which one puts more money back in your pocket — plus what it's worth in actual tax saved.

Your workspace

Office area (sq ft)

Total home area (sq ft)

Annual home expenses ($) — rent/mortgage interest, utilities, insurance, repairs

Your combined tax rate (%)

Best available deduction

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Simplified method ($5/sq ft)

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Actual expense method

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Business-use percentage

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Estimated tax savings

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Two methods, one choice each year

If you're self-employed and use part of your home regularly and exclusively for business, you can deduct it two ways. The simplified method pays a flat $5 per square foot, capped at 300 square feet — a maximum deduction of $1,500, with no receipts to keep. The actual expense method deducts your business-use percentage (office area ÷ total home area) of real costs: rent or mortgage interest, utilities, insurance, repairs and depreciation.

The actual method almost always wins for larger spaces or expensive housing markets, but it demands records. The calculator above runs both and shows the gap, plus what the winning deduction is worth at your tax rate.

Two rules trip people up. "Exclusively" is strict — a desk in the corner of a bedroom that doubles as a guest room generally doesn't qualify. And the deduction can't create a loss: it's limited to your business income for the year, though unused amounts can carry forward under the actual method. This is an estimate, not tax advice; check with a CPA before filing.

Frequently asked questions

Can employees claim the home office deduction?

Generally no. The deduction for unreimbursed employee expenses was suspended for W-2 employees, so it applies to self-employed people, freelancers and independent contractors filing Schedule C.

Does claiming a home office trigger an audit?

This is a persistent myth. The deduction is legitimate and extremely common among the self-employed. What draws scrutiny is claiming an implausible share of your home or failing the exclusive-use test — not the deduction itself.

Can I switch methods from year to year?

Yes. You may choose the simplified method one year and the actual expense method the next. Run this calculator each year, since a move, a rent increase or a change in your workspace can flip which method wins.