Home office deduction calculator (2026)

Compare the simplified method ($5/sq ft up to 300 sq ft) vs actual expenses (rent, utilities, depreciation × business %). Picks the higher number for you.

Just the dedicated office space — not total home. Must be exclusively + regularly used for business.
For the actual-method business-use percentage.
Renters: total rent paid. Owners: mortgage interest only (not principal).
Electric, gas, water, sewer, trash. Not internet/phone (those are separately deductible).
Insurance, property tax, repairs, HOA, lawn care.
Annual depreciation on the home structure (not land). Renters: leave $0. Triggers depreciation recapture when you sell.
For estimating the dollar tax savings from the deduction.
Self-employed taxpayers also save 14.13% in SE tax (15.3% × 0.9235).
Best deduction (the larger of the two methods)

Side-by-side comparison

Simplified method ($5 × sq ft, capped at 300)
Business-use percentage (office sqft / home sqft)
Actual method total deduction
Difference (actual minus simplified)

Estimated tax savings

Federal income tax saved (deduction × bracket)
SE tax saved (deduction × 14.13%)
Total tax savings

Two methods, pick the bigger

The IRS allows two methods for the home office deduction. You pick whichever produces the larger deduction — and you can switch year to year.

Simplified method (§280A safe harbor)

Actual method (Form 8829)

Quick rule of thumb

Eligibility — the 3-part test

Per IRC §280A and IRS Publication 587, you can claim the home office deduction only if:

  1. Exclusive use: the space is used ONLY for business. A guest room that doubles as an office on weekends fails. A dedicated 8x10 corner of the living room used only for work passes.
  2. Regular use: used regularly for business — not occasionally. A few hours a year doesn't count.
  3. Principal place of business: the home office is your primary work location, OR you meet clients/customers there, OR it's a separate structure (detached studio).

Three exceptions waive the exclusivity test:

What W-2 employees should know

Important: W-2 employees cannot claim the home office deduction for unreimbursed work-from-home expenses. The Tax Cuts and Jobs Act eliminated miscellaneous itemized deductions through 2025; OBBBA (P.L. 119-21) made this permanent. The home office deduction is exclusively for self-employed taxpayers (Schedule C, Schedule E rentals, Schedule F farms) and certain S-corp owners under accountable plan reimbursement. 1099 vs W-2 implications.

S-corp owners: use an accountable plan

S-corp shareholders can't claim the home office deduction directly on the personal return — but the corporation can reimburse you for home office expenses under an accountable plan, which is fully deductible to the corp and tax-free to you. The reimbursement uses the same actual-method calculation but the paperwork lives with the corp.

Watch out for depreciation recapture (homeowners)

If you use the actual method and claim depreciation on the home structure, the IRS recaptures it as ordinary income (up to 25%) when you sell — even if you'd otherwise qualify for the §121 home sale exclusion ($250k/$500k tax-free gain). The simplified method avoids this entirely. For homeowners planning to sell within 5 years, simplified is often the right call even if actual is slightly bigger today.

Related tools and guides

Estimates only — not tax, legal, or financial advice. Sources: IRC §280A, IRS Publication 587 (Business Use of Your Home), IRS Rev. Proc. 2013-13 (simplified method), Form 8829 instructions. The home office deduction is among the most-audited deductions on Schedule C — keep documentation. For decisions affecting your finances, consult a licensed CPA or enrolled agent.