Disclosure: This page contains an affiliate link (marked). We may earn a commission at no cost to you. Verdicts are our own.
Not tax advice. Results are estimates built from the assumptions shown. Your actual taxes depend on your full situation. Check with a tax professional. Nothing you type leaves your browser.
Your home and office
Yearly home costs (for the actual-expense method)
The two methods
- Simplified: $5 per square foot of office space, up to 300 square feet, so at most $1,500. No depreciation and no records of actual home costs needed.
- Actual expenses: the share of your home used for business (office size ÷ home size) times eligible home costs such as rent, mortgage interest, real estate taxes, utilities, insurance and repairs. You also claim depreciation if you own the home, which this calculator does not model. Reported on Form 8829.
Who qualifies
The space must be used regularly and exclusively for your business, and generally be your principal place of business (or where you meet clients, or a separate structure). A desk in the living room that your family also uses usually doesn't count. Read the full test in IRS Publication 587 and Form 8829.
Limits to know
- The deduction can't exceed the profit from the business use of the home, so it can't create a loss.
- Employees can't claim it under current law; it is for self-employed people.
- Records still matter. Keep a floor plan or measurements and photos showing the space.
Source: IRS Publication 587 (Business Use of Your Home). The $5 and 300 sq ft figures are from the IRS simplified method. Confirm details on the IRS page before filing.
FAQ
Is the simplified method or actual expenses better?
Simplified is faster and often wins for small spaces or low home costs. Actual expenses can be larger if you pay high rent or housing costs and your office is a big share of your home. Run both numbers above.
Can I switch methods year to year?
The IRS says you can choose either method each year for a qualifying home, but check Publication 587 for the rules about carryover and depreciation when you switch.
Does a home office deduction trigger an audit?
We can't verify that claim. What matters is that you meet the exclusive-use rules and can document the space and costs.