Home Office Tax Deduction Calculator
Determine how much you can write off your taxes by working from home. Compare the quick Simplified Method against the detailed Actual Expense Method.
Area of your dedicated workspace
Total livable area of your home
Electricity, water, heating, and internet
Total annual rent or mortgage interest payments
What is the "Simplified Method" for home office deductions?
The Simplified Method is a standard deduction provided by the IRS that allows you to claim a set rate (currently $5 per square foot) for the portion of your home used exclusively for business. It is much easier than the "Actual Expense Method" because it doesn't require tracking every single utility bill or mortgage interest payment.
Does the office space have to be a separate room?
To qualify, the space must be used "regularly and exclusively" for business. If you use your dining table for work, it doesn't count. If you have a dedicated corner of a room that is only used for business, that square footage can be deducted. The "exclusive use" rule is strictly enforced by the IRS.
Can I deduct a portion of my rent or mortgage?
If you use the "Actual Expense Method," you can deduct a percentage of your rent or mortgage interest based on the percentage of your home used for business. For example, if your office is 10% of your home's total square footage, you can deduct 10% of those costs. The Simplified Method replaces this calculation with the flat square-footage rate.
Which method is better: Simplified or Actual?
The Simplified Method is better for those who want a fast, audit-proof calculation and have a relatively small office. The Actual Expense Method is usually better for people with very high rent, high utility costs, or those who own a home with a large mortgage, as the percentage-based deduction can be significantly higher than the $5/sqft flat rate.