Home Office Deduction Calculator

The home office deduction lets self-employed people write off the part of their housing costs that goes to running a business. There are two ways to work it out and you may pick whichever gives the bigger number, switching between them from one year to the next.

Simplified method:

Deduction = Office Area (sq ft) x $5 per sq ft
Capped at 300 sq ft, so $1,500 is the most it can ever produce. No receipts, no depreciation schedule, one line on the return.

Metric note: multiply m² by 10.764 to get sq ft.
Deduction = Office Area (m²) x 10.764 x $5

Regular method:

Business Use % = Office Area / Total Home Area x 100
Deduction = Total Home Expenses x Business Use %

Count rent or mortgage interest, property tax, all utilities, home and renter insurance, repairs, and depreciation if you own. Keep two things out of that total. A repair made only to the office room is deductible in full. Internet is claimed at its own business-use share, the part of its use that is for work, which has nothing to do with the floor area.

Worked example:

A 200 sq ft spare room in a 1,500 sq ft house, $24,000 of annual housing costs.

• Business use: 200 ÷ 1,500 = 13.3%
• Simplified: 200 × $5 = $1,000
• Regular: $24,000 × 13.3% = $3,200

The regular method wins by $2,200 here, and it usually does once rent is involved. The simplified rate has not moved since 2013, and $5 a square foot has not reflected what housing costs for a long time.

Two things this deduction does that most write-offs do not. It comes off Schedule C, so it cuts self-employment tax as well as income tax, which makes each dollar worth roughly 14 cents more than a plain itemized deduction. (That 14 cents holds while your self-employment earnings sit below the Social Security wage base, $184,500 for 2026. Above it only the 2.9% Medicare part is left, worth under 3 cents.) And it cannot create a loss: the regular method is capped at the gross income from the business after other expenses, with the excess carried forward to a future year.

Who qualifies:

• The space must be used regularly and exclusively for the business. A desk in the corner of the living room fails the exclusive test, and so does a guest room that is a guest room twice a year.
• It must be your principal place of business, or a place you regularly meet clients.
• Self-employed, contractors, gig workers, partners in a partnership.
• W-2 employees cannot claim it at all, even working from home full time. The 2017 tax law suspended it from 2018, and the One Big Beautiful Bill Act of 2025 made that permanent. A few states still allow it on the state return.

The catch nobody mentions: depreciation claimed under the regular method is taxed back at up to 25% when you sell the house, and the home-sale exclusion does not cover it. The rest of the gain on an office inside the house is still excluded as usual. An office in a separate building, a converted garage or a studio in the garden, is different: its share of the gain gets no exclusion at all. On a house you plan to sell soon, the simplified method can be the cheaper answer even when it produces a smaller deduction, because it claims no depreciation.