Home Office Deduction Calculator
Compare the simplified and actual-expense home office deduction methods side by side, using your own square footage and expenses.
Simplified vs. actual method
Simplified method
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$5/sq ft, capped at 300 sq ft
Actual expense method
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— business use of home
Your larger deduction
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Estimates for tax year 2026, for informational purposes only — not tax advice. Assumes your space passes the IRS's regular-and-exclusive-use test; see the home office & mileage guide for what qualifies and what records to keep.
The two home office deduction methods
The simplified method multiplies your office's square footage by $5, capped at 300 sq ft — a maximum deduction of $1,500, with no need to track actual expenses. The actual-expense method applies your office's percentage of your home's total square footage to your real home costs (mortgage interest or rent, utilities, insurance, repairs, depreciation) — more recordkeeping, but often a bigger deduction for a larger dedicated office or an expensive home.
Worked example: a small office in an average home
A 140 sq ft office in an 1,800 sq ft home with $22,000/year in home expenses:
- Simplified deduction: $700
- Actual-expense deduction: $1,711 (7.8% business use)
- Larger deduction: $1,711 (actual method)
Worked example: a large dedicated office
A 350 sq ft dedicated office in a 1,200 sq ft home with $30,000/year in home expenses:
- Simplified deduction: $1,500 (capped at 300 sq ft, even though the office is 350)
- Actual-expense deduction: $8,750 (29.2% business use)
- Larger deduction: $8,750 (actual method)
Frequently asked questions
What counts as a home office for tax purposes?
The IRS requires the space to be used regularly and exclusively for business — a spare room used only as an office qualifies; a kitchen table used for both business and family dinners generally does not, under the exclusive-use test.
Which method gives a bigger deduction, simplified or actual?
It depends on your office size relative to your home and how large your actual home expenses are. The simplified method is capped at $1,500 (300 sq ft x $5), so a larger dedicated office in an expensive home usually favors the actual-expense method — this calculator computes both so you don't have to guess.
Can I switch methods from year to year?
Yes, you can choose either method each year regardless of what you used previously, though switching away from the actual method after claiming depreciation has its own rules — keep records either way.
Do I need receipts for the simplified method?
No — the simplified method just needs your office's square footage. The actual-expense method requires receipts and records for the home costs you're allocating (mortgage interest or rent, utilities, insurance, repairs).