FreelanceTaxKit

Home office deduction calculator

Compare the two IRS methods side by side. Enter your office size and home costs to see which one gives you the bigger deduction.

Tax year 2026 · US federal · Figures checked October 25, 2026 · Sources

Best deduction

$2,663

  • Business share of home12.5%
  • Simplified method ($5 per sq ft)$750
  • Regular method (actual costs)$2,663
  • Difference$1,913

The regular method gives the bigger deduction here. It needs Form 8829 and records of each cost.

Best deduction$2,663

Worked example

A 150 sq ft office in a 1,200 sq ft rented apartment is 12.5% of the home. With $18,000 rent, $3,000 utilities and $300 insurance, the regular method gives $2,663 against $750 for the simplified method.

Do you qualify?

The space must be used regularly and exclusively for your business, and it must be your principal place of business or a place where you regularly meet clients. A desk in the corner of a bedroom can qualify if that area is used only for work. A dining table you also eat at does not.

The deduction is for the self-employed. Employees who work from home cannot claim it on their federal return.

The simplified method

Multiply your office area by $5, up to 300 square feet, for a maximum of $1,500. There is no Form 8829, no depreciation, and you can still deduct all of your mortgage interest and property tax on Schedule A if you itemise. You cannot carry an unused amount forward.

The regular method

Work out the office's share of your home (office area รท total area) and apply it to actual costs: rent or mortgage interest, property tax, utilities, insurance, repairs and depreciation if you own. Expenses only for the office, such as painting it, count in full. You file Form 8829.

The regular method usually wins in high-rent cities and for larger offices. Owners should know that depreciation claimed now can be taxed when the home is sold.

The income limit

Under either method the deduction cannot be more than your business profit before it. With the regular method, the excess carries forward to next year. Enter your profit in the calculator to apply the limit.

Common questions

What is the maximum simplified home office deduction?

$1,500: $5 a square foot for up to 300 square feet.

Can renters claim the home office deduction?

Yes. Renters use the business share of rent under the regular method, or the $5 rate under the simplified method.

Can I switch methods each year?

Yes. You can pick whichever method suits you in each tax year.

Does the home office deduction cause an audit?

Claiming it is not a red flag on its own. Keep a floor plan, photos and records of costs in case you are asked.

Official sources: IRS: Home office deduction, IRS Publication 587. This calculator gives estimates for planning, not tax advice. Read the disclaimer.