The IRS gives self-employed people two ways to figure the home office deduction. The simplified method is $5 for each square foot of the office, up to 300 square feet, so it tops out at $1,500. The regular method deducts the office’s share of your actual home costs: rent or mortgage interest, real estate taxes, insurance, utilities, repairs and depreciation, figured on Form 8829. You can pick whichever is better each year. This calculator runs both and shows which one gives the bigger deduction. Everything runs in your browser and nothing is sent anywhere.

Office area (sq ft)
Whole home area (sq ft)
Months used for business this year (count months with 15 or more days of use)
Gross income from the business
Other business expenses, not from the home

Whole-home costs for the year (enter yearly totals for the whole home; the calculator takes the office share for the months used)

Rent
Mortgage interest
Real estate taxes
Homeowners or renters insurance
Utilities (electric, gas, water, trash, internet share)
Repairs and maintenance for the whole home
Other whole-home costs (HOA dues, security)
Direct office costs (painting or repairs to the office only)

Depreciation (owners only, optional)

Home cost or adjusted basis, not counting land (use fair market value if that was lower when the office started)
Month the office first went into use, if it was this year
Operating expense carryover from last year's Form 8829
Depreciation carryover from last year's Form 8829

How the math works

simplified = $5 x office sq ft (max 300) x months used / 12
business % = office sq ft / home sq ft
regular    = business % x (mortgage interest + taxes)
           + business % x (rent + insurance + utilities + repairs + other) + direct office costs
           + business % x home basis without land x 2.564% (39-year MACRS)
           all whole-home costs x months used / 12

Example with the default inputs: a 200 sq ft office in a 1,600 sq ft home is 12.5% of the home. The simplified method gives 200 x $5 = $1,000. The regular method gives 12.5% of $13,000 mortgage interest and taxes ($1,625), plus 12.5% of $5,000 insurance, utilities and repairs ($625), plus 12.5% of $240,000 x 2.564% depreciation ($769.20), for $3,019.20. Here the regular method is better by $2,019.20.

The rules this follows

  • Who can take it. You must use the space regularly and only for your business (exclusive use), and it must be your main place of business or a place you meet clients. Self-employed people claim it on Schedule C. Employees can’t take the deduction for tax years after 2017, even when they work from home.
  • Simplified method. $5 per square foot of the area used for business, up to 300 square feet. Home mortgage interest and real estate taxes stay deductible in full on Schedule A if you itemize, and there’s no depreciation, so nothing is recaptured when you sell. If you used the office for part of the year, the area is averaged by month: each month counts up to 300 square feet, a month with fewer than 15 days of business use counts as 0, and the total is divided by 12.
  • Regular method. Costs for the whole home (indirect expenses) are deducted at the business percentage, and costs only for the office (direct expenses) are deducted in full. You can use any reasonable method for the percentage; area is the most common. Expenses only count for the part of the year you used the office, so this calculator takes months used / 12 of yearly totals.
  • Depreciation. Owners depreciate the business share of the home, not the land, over 39 years using MACRS straight line with the mid-month convention. The first year depends on the month you started: 2.461% for January down to 0.107% for December (Pub. 587 Table 2), then 2.564% a year. When you sell, the depreciation you were allowed is taxed as unrecaptured section 1250 gain.
  • Income limit and carryover. Either method is limited to the gross income from the business minus its other expenses. With the regular method, the office share of mortgage interest and taxes is deducted first, then operating costs, then depreciation, and anything over the limit carries over to the next year you use the regular method. With the simplified method, the excess is lost.
  • Switching. You can choose either method each year on a timely filed original return. Once you file, you can’t change that year’s method. Regular-method carryovers wait during a simplified year.

Sources: IRS simplified option for home office deduction, Publication 587, Business Use of Your Home, Form 8829 and Rev. Proc. 2013-13. Rules checked on October 20, 2026. This is general information, not tax advice.

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