Home Office Deduction Calculator

The IRS simplified method lets you deduct $5 per square foot of your home office, up to 300 square feet, for a maximum deduction of $1,500. No expense tracking or depreciation calculation is required.

You calculate your business-use percentage (office square footage ÷ total home square footage), then apply that percentage to your actual home expenses — mortgage interest or rent, utilities, insurance, repairs, and depreciation.

Whichever produces the bigger deduction for your situation. Homes with high expenses (rent, utilities) relative to office size often favor the actual method; smaller offices in low-cost homes often do better with the simplified method's flat rate. You can switch methods from year to year.

Yes, if you own your home, the business-use portion is depreciated over 39 years under the actual expense method. Note this can trigger depreciation recapture (a tax) when you eventually sell the home — the simplified method avoids this entirely.

The space must be used regularly and exclusively for business. As of current rules, W-2 employees generally cannot claim it, only self-employed individuals and qualifying business owners.