Free tool · Tax year 2026
Home Office Deduction Calculator
The IRS gives you two ways to deduct your home office — and lets you pick whichever pays more, every year. Compare both in seconds. Free, no signup.
| Simplified method | Actual expense method | |
|---|---|---|
| How it works | $5 × office sq ft (300 cap) | |
| Recordkeeping | Just square footage | Receipts for all home expenses |
| Deduction |
Estimate only. The actual-expense method shown here uses a simple square-footage percentage of the expenses you enter; it does not model depreciation, the gross-income limitation, or day-care/storage special rules (IRS Publication 587 covers these). Not tax advice.
The two methods, briefly
| Simplified | Actual expenses | |
|---|---|---|
| Formula | $5 × office sq ft | Business % × home expenses |
| Maximum | $1,500 (300 sq ft) | No fixed cap |
| Records needed | Square footage | All receipts + bills |
| Depreciation | None | Allowed (homeowners; recapture applies) |
| Best for | Small offices, simplicity | Renters, larger offices, high housing costs |
Source: IRS Publication 587, Business Use of Your Home.
Frequently asked questions
Who qualifies for the home office deduction?
Self-employed people (sole proprietors, single-member LLCs, contractors) who use part of their home regularly and exclusively for business, as their principal place of business. W-2 employees working remotely do not qualify — that deduction was suspended for employees.
What does "regularly and exclusively" mean?
The space must be used only for business, on an ongoing basis. It doesn't need to be a separate room — a clearly defined area works — but a space that doubles as a guest room or dining area generally fails the exclusive-use test.
Which method is better: simplified or actual expenses?
The simplified method ($5 per square foot, capped at 300 sq ft = $1,500 max) wins on ease. The actual method (business-use percentage of rent or mortgage interest, utilities, insurance, repairs) usually wins on dollars for renters in higher-cost areas. Run both in the calculator — you can choose each year whichever is better.
Can renters take the home office deduction?
Yes — rent is one of the best expenses for the actual method, since your business-use percentage applies to the full rent amount. A 15% business-use share of a $2,000/month apartment is a $3,600 annual deduction.
Does the home office deduction trigger audits?
This fear is mostly outdated. The deduction is well-established and the simplified method made it routine. Claim a defensible space, keep a photo and measurements, use it exclusively for work, and take what the rules give you.