Home Office Deduction Calculator — Simplified vs Regular, Free

Simplified or regular: which home office deduction is worth more?

The simplified method is $5 per square foot up to 300 sq ft (max $1,500). The regular method (Form 8829) deducts your office's share of actual costs plus depreciation. Enter your numbers and see both, in the IRS's own limit order, with the estimated tax each saves.

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1. Your home and office

Total home square footage

Office square footage (exclusive, regular use)

Months used for business this year (1-12)

First year of business use? Month it began (1-12), else blank

I own the home (uncheck if renting)

2. Business income

Gross income from the business ($)

Other business expenses, excluding home office ($)

3. Annual home costs (whole home, full year)

Mortgage interest ($)

Real estate taxes ($)

Rent ($)

Utilities ($)

Homeowner/renter insurance ($)

Repairs and maintenance ($)

HOA, security, other ($)

Direct office-only expenses, e.g. painting the office ($)

4. Depreciation and carryover (regular method)

Home cost or value when office use began ($, lesser of basis and market value)

Land value in that figure ($)

Operating-expense carryover from last year ($)

Depreciation carryover from last year ($)

5. Estimated tax value

Your federal marginal tax rate (%)

Include self-employment tax saved (15.3% of 92.35%)

I itemize on Schedule A

Enter square footage and income, then click Compare methods.

What this does not cover

Self-employed filers only. Employees cannot deduct home office expenses on a personal return.
Exclusive and regular use. The tool cannot check that your space qualifies or is your principal place of business.
Daycare, storage-only and multiple-home cases follow different rules and are not modelled.
Simplified tax estimate. The tax value ignores the QBI deduction, the Social Security wage base, the SALT cap and state tax. Treat it as a ranking of the two methods, not a refund forecast.
Depreciation table. Uses the 39-year mid-month rates from the Form 8829 instructions; confirm the current year's rates before filing.

Common questions

Which is better, the simplified or the regular home office deduction?

The simplified method is $5 per square foot up to 300 square feet, so at most $1,500, with no depreciation and no records of actual expenses. The regular method deducts the business-use share of actual expenses plus depreciation if you own, and has no size cap. It usually wins for larger offices, higher housing costs, or renters with high rent; the simplified method wins for small offices and low costs. This calculator computes both and compares their tax value.

What is the gross income limit on the home office deduction?

The deduction cannot exceed the gross income from the business less your other business expenses; it cannot create or increase a loss. Under the regular method the business share of mortgage interest and real estate taxes is allowed first, then operating expenses, then depreciation, and anything above the limit carries forward. Under the simplified method the excess is lost.

Does the regular method create a tax bill when I sell my home?

It can. Depreciation taken, or allowable, on the office space reduces your basis, and that part of the gain is taxed as unrecaptured Section 1250 gain at up to 25% when you sell, even if you never claimed the depreciation. The simplified method has no depreciation, so it avoids this.

Can employees deduct a home office?

No. The IRS says an employee cannot deduct expenses for the business use of a home on a personal return. The deduction is for self-employed filers, such as sole proprietors and single-member LLCs filing Schedule C.

Is this tax advice?

No. This tool applies published IRS rules to the numbers you enter and does not replace IRS Publication 587, Form 8829 instructions, or a qualified tax professional.