Home Office Deduction Calculator
Legal basis: IRC §280A(c)(1) (exclusive and regular business use); Rev. Proc. 2013-13 (simplified method); Form 8829; Publication 587 · checked 2026-10-04 · Rates and limits change — verify the current figures.
If you use part of your home regularly and exclusively for business, IRC §280A lets you deduct the cost of that space in one of two ways. The regular method adds up everything it costs to run the home for the year — rent or mortgage interest allocable to the home, utilities, insurance, repairs, depreciation if you own — and multiplies the total by the percentage of the home used for business. The simplified method, created by Rev. Proc. 2013-13, skips all of that: multiply the square footage of the office (up to a cap of 300 square feet) by a flat dollars-per-square-foot rate.
The eligibility test is the same under both methods and is where most claims fail. The space must be used exclusively and regularly as your principal place of business, or for meeting patients, clients, or customers, or in a separate structure used only for business. Exclusive means exclusive: a desk in the corner of a living room that family members also use does not qualify, no matter how many hours you work there. Employees are not eligible under current law, so this deduction belongs to the self-employed — Schedule C filors, gig workers, and partners whose home office is required for the business and not reimbursed.
Both methods are also capped by your business income: the deduction cannot create or increase a net loss from the business. The regular method carries any disallowed amount forward to future years; the simplified method simply loses it. On the other side of the ledger, the simplified method cannot produce a depreciation recapture bill later, because it takes no depreciation — often the quiet deciding factor for homeowners.
This calculator computes both methods side by side from your office square footage, home square footage, annual home expenses, and the current rate and cap, and highlights whichever is larger. The per-square-foot rate and the 300-square-foot cap come from IRS guidance and legislation, so they are editable inputs — verify the current figures in Publication 587. The result is an educational estimate, not tax advice, to confirm with the IRS instructions or a CPA.
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How the math works
- Simplified method = square feet of office (up to the cap) × the per-square-foot rate, capped at the annual maximum.
- Regular method = total annual home expenses × business-use percentage, where the percentage is office square feet ÷ home square feet.
- The space must be used exclusively and regularly for business under IRC §280A(c)(1); a mixed-use room never qualifies.
- Either method is limited to the gross income from the business use of the home; the regular method can carry disallowed amounts forward.
Frequently asked questions
Who qualifies for the home office deduction?
What does exclusive use actually mean?
How does the simplified method work?
When is the regular method better?
Can I switch methods year to year?
Can the deduction create a loss?
Do I need Form 8829?
This calculator is an educational estimate, not tax advice. The simplified rate and square-foot cap are set by IRS guidance and legislation and can change, and eligibility turns on facts this tool cannot check (exclusive use, principal place of business, employee status). Verify current rules with IRS Publication 587 or a CPA.