Home Office Deduction Calculator
Compare simplified vs actual expense methods for the home office deduction. Available for self-employed individuals who use part of their home exclusively for business.
Calculate Home Office Deduction
Simplified Method
$5 per sq ft, up to 300 sq ft = $1,500 max
Actual Expense Method
$
$
$
$
How It Works
Simplified Method
- $5 per square foot of home office
- Maximum 300 sq ft = $1,500 max deduction
- Simple—no complex calculations or record keeping
Actual Expense Method
- Calculate business percentage: Office sq ft ÷ Total home sq ft
- Apply percentage to actual expenses (rent/mortgage interest, utilities, insurance, repairs, depreciation)
- Potentially larger deduction but requires detailed records
Requirements
The space must be used regularly and exclusively for business. W-2 employees cannot take this deduction (post-2017 tax reform).
Examples
Example: 200 sq ft office in 2,000 sq ft home
Simplified: 200 × $5 = $1,000
Actual: 10% of $24,000 expenses = $2,400
→ Actual method saves $1,400 more
Frequently Asked Questions
Who qualifies for home office deduction?
Self-employed individuals, freelancers, and independent contractors
who use a portion of their home exclusively and regularly for business. W-2 employees do not
qualify after 2017 tax reform.
What does "exclusive use" mean?
The space must be used only for business. A desk in a guest bedroom
that's also for guests doesn't qualify. A dedicated room or clearly separated area does.
Which method should I choose?
Calculate both and compare. If your actual expenses are high
relative to your office size, actual method wins. If you want simplicity and have a smaller
office, simplified may be fine.
Can I switch methods?
Yes, you can choose different methods in different years. But you
must be consistent within a tax year.
What about depreciation?
With the actual method, if you own your home, you can depreciate the
business portion. This is complex—consider consulting a tax professional.
Does this trigger an audit?
The home office deduction itself doesn't trigger audits if you
legitimately qualify. Keep good records and be conservative with your claims.