Lanternhill Studio · Bank CSV Categorizer

Home Office Deduction Calculator (Simplified vs Actual)

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Compare the two IRS methods for the business use of your home. Both need a space you use regularly and exclusively for business (with a few exceptions, such as daycare and inventory storage). See Publication 587.

Not tax advice. This tool does arithmetic on the numbers you enter. Whether a trip or payment counts, which rate or threshold applies, and how to report it depend on your situation. Check with a tax professional or the IRS pages linked here.

1. Space

Office area (sq ft) Total home area (sq ft)

2. Yearly home expenses (actual-expense method)

Indirect expenses for the whole home are multiplied by your business-use percentage. Direct expenses, for the office only, count in full (Pub. 587, Table 1).

Rent $Mortgage interest $Real estate taxes $Utilities $Insurance $Repairs (whole home) $Other indirect $

Direct expenses (office only) $Home depreciation, business part, if you own (from Form 8829 / Pub. 587) $

3. Income limit (optional)

Under both methods, the deduction can't be more than the gross income from the business use of your home minus business expenses not related to the home. Gross income from the business $Other business expenses $

4. Comparison

Key rules from the IRS

Simplified method: $5 per square foot of home used for business, up to 300 square feet (so at most $1,500). There's no home depreciation, and home-related itemized deductions such as mortgage interest and real estate taxes are claimed in full on Schedule A. (IRS: Simplified option for home office deduction)
Actual-expense (regular) method: the business percentage is usually the office area divided by the total home area. Indirect expenses such as rent, utilities and insurance are deductible at that percentage. Schedule C filers use Form 8829. (Pub. 587)
You can choose either method each year, but you can't switch methods for that year after filing. With the regular method, an amount over the income limit can be carried over; with the simplified method it can't.
Employees can't claim this deduction (for tax years after 2017).

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How-to guide: Home Office Deduction: Simplified vs Actual Expense Method

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