Home Office Deduction Calculator
Compare the simplified and actual home office deduction methods to find which gives the larger write-off.
Want to understand the concept, not just the number? Read The Self-Employed Business Owner Guide .
How it's calculated
If you are self-employed and use part of your home regularly and exclusively for business, you can deduct a home office. The IRS offers two methods, and you can pick whichever gives the larger deduction each year.
The simplified method is easy. You deduct 5 dollars for every square foot of office, up to 300 square feet, for a maximum of 1,500 dollars. The actual method takes more work but can be worth far more. You figure the office as a percentage of your home, then apply that percentage to your real home expenses, rent or mortgage interest, utilities, insurance, and repairs.
Take the default. A 200 square foot office in a 2,000 square foot home is 10 percent of the space. The simplified method gives 200 times 5 dollars, or 1,000 dollars. The actual method applies the 10 percent to 24,000 dollars of home expenses, for 2,400 dollars, more than twice as much. When your home expenses are high, the actual method usually wins, which is why it pays to run both. Keep records either way, since the deduction requires the space to be used only for business.
Assumptions
- Simplified method is 5 dollars per square foot of office, capped at 300 square feet. Actual method is the office share of the home applied to eligible home expenses.
- The office must be used regularly and exclusively for business. Depreciation under the actual method is not modeled here.
Last updated: 2026-08-08
These assumptions follow our general methodology.
Frequently asked questions
What are the two home office deduction methods?
The simplified method deducts 5 dollars per square foot of office up to 300 square feet. The actual method deducts the office percentage of your home applied to real home expenses. You can choose the larger one each year.
Which home office method is better?
The actual method usually gives a larger deduction when your home expenses are high, since it captures a share of rent or mortgage interest, utilities, and more. The simplified method is easier but capped at 1,500 dollars. Running both is the only way to be sure.
Can I take the home office deduction as an employee?
Generally no. Since 2018, W-2 employees cannot deduct a home office, even if they work from home. The deduction is for the self-employed, including freelancers, contractors, and business owners who use part of their home for the business.
What does regular and exclusive use mean?
The space must be used only for business and on a regular basis. A spare room used solely as an office qualifies, but a kitchen table you also eat at does not. The exclusive-use rule is strict, so a dedicated area is safest.