Home Office Deduction Calculator
Compare the simplified and regular methods to maximize your home office tax deduction.
Your Home Office
Simplified method: max 300 sq ft
Used for regular method business percentage
Your deduction cannot exceed your SE income
Annual Home Expenses (used for regular method)
Typically: (home cost - land) / 39 years
Painting office, dedicated phone line, etc.
Your Home Office Deduction
| Feature | Simplified | Regular |
|---|---|---|
| Calculation | 200 sqft × $5 | 13.3% of home expenses |
| Deduction amount | $1,000 | $4,447 |
| Max deduction | $1,500 (300 sqft × $5) | No fixed limit |
| Recordkeeping | Minimal — just square footage | Must track all home expenses |
| Depreciation | Cannot claim | Can claim (recaptured at sale) |
| Carryforward | No | Yes — if limited by income |
Important Rules & Tips
- 1.Regular method saves $3,447 more — worth the extra recordkeeping
- 2.W-2 employees cannot claim the home office deduction (eliminated by TCJA 2018–2025)
- 3.Your office must be used regularly and exclusively for business — no dual-purpose rooms
- 4.Direct expenses (office-only repairs, dedicated phone line) are 100% deductible under regular method
Only self-employed individuals and independent contractors can claim the home office deduction. W-2 employees are not eligible (2018–2025). Consult a tax professional for your specific situation.
Two Ways to Claim the Home Office Deduction
The IRS offers two methods: the simplified method ($5 per square foot, maximum 300 square feet = $1,500 cap) and the regular method (actual expenses proportional to office percentage of your home). The regular method requires more recordkeeping but often produces a larger deduction, especially if you have a larger office or high housing costs. You can switch methods year to year.
Simplified vs Regular Method — Quick Comparison
| Feature | Simplified | Regular |
|---|---|---|
| Calculation | $5 × office sq ft (max 300) | % of actual home expenses |
| Maximum deduction | $1,500 | Limited by SE income |
| Depreciation | Not claimed (no recapture) | Claimed (recaptured at sale) |
| Recordkeeping | Just office square footage | Track all home expenses |
| Carryforward | No | Yes, if limited by income |
| Best when | Office is small, expenses are low | Large office, high rent/mortgage |
Deductible Home Office Expenses
| Expense Type | Examples | How It's Calculated |
|---|---|---|
| Indirect expenses | Rent, mortgage interest, utilities, insurance | Business % of total |
| Direct expenses | Office painting, repairs to office only | 100% deductible |
| Unrelated expenses | Kitchen remodel, yard work | Not deductible |
Frequently Asked Questions
Can W-2 employees claim the home office deduction?
No. The Tax Cuts and Jobs Act (TCJA) eliminated the home office deduction for W-2 employees from 2018 through 2025. Only self-employed individuals, independent contractors, and statutory employees can claim it. If the TCJA provisions expire after 2025, the employee deduction may return — but for now, only Schedule C filers qualify.
What qualifies as "regular and exclusive" use?
Your office space must be used regularly (not occasionally) and exclusively (not a spare bedroom where kids also play) for business. A dedicated desk in a corner of a room qualifies if that area is used solely for business. The exception: if you use your home for daycare or store inventory/product samples, the exclusive-use requirement is relaxed.
Will claiming a home office increase my audit risk?
The home office deduction was historically associated with higher audit risk, but the IRS has stated that legitimate claims — especially using the simplified method — are straightforward. The key to avoiding issues: maintain documentation, keep the space genuinely dedicated to business, and ensure your deduction is proportionate to your income. A $1,500 deduction on $80,000 of SE income is unremarkable; a $15,000 deduction on $20,000 income raises flags.
See also: Self-Employment Tax Calculator and Business Depreciation Calculator.