Home Office Deduction Calculator
Calculate your home office tax deduction using the IRS simplified method ($5/sq ft) or regular method (actual expenses). For self-employed Schedule C filers.
Reviewed for accuracy by Marcus Webb and the Blueprint Dynamics editorial team (last updated July 2026). Our calculators use primary-source formulas and are cross-checked against IRS publications, Fannie Mae guidelines, and Federal Reserve data. Learn more about our methodology.
IRS simplified vs. regular method — for self-employed only (Schedule C)
Annual Home Office Deduction (Simplified Method)
$750
$5 × 150 sq ft (max 300 sq ft)
You can use whichever method gives the larger deduction.
Who qualifies for the home office deduction
The home office deduction is available to self-employed individuals filing Schedule C, partners in partnerships who work from home, and S-Corp owner-employees under specific conditions. It is NOT available to W-2 employees — the Tax Cuts and Jobs Act (TCJA) suspended the employee home office deduction from 2018 through at least 2025. Even if your employer requires you to work from home, you cannot deduct home office expenses on a federal return as a W-2 employee during this period. The deduction is exclusively for business owners and self-employed people.
The exclusive and regular use requirement
The IRS requires that the home office space be used regularly and exclusively for business. Regularly means ongoing use, not occasional. Exclusively means only for business — the space cannot double as a guest room, playroom, or general storage area. A dedicated room used solely as a business office qualifies. A corner of the living room or kitchen table typically does not. The space does not need to be separated by walls — a portion of a room can qualify if it is demonstrably set apart and used exclusively for work — but this is harder to substantiate in an audit. The home must also be your principal place of business or a place where you regularly meet clients.
Simplified method vs. regular method
The simplified method: multiply the square footage of your dedicated office space by $5/sq ft, up to a maximum of 300 sq ft ($1,500 maximum deduction). This method requires no receipts or expense tracking for the home office itself — just the square footage. The regular method: calculate the percentage of your home used for business (office sq ft / total home sq ft), then apply that percentage to all qualifying home expenses: mortgage interest or rent, utilities, homeowner's/renter's insurance, internet, and home depreciation. If your 200 sq ft office is 10% of your 2,000 sq ft home, and your qualifying annual home expenses total $28,000, your deduction is $2,800. The regular method produces a larger deduction for most people, but requires substantiated records of all home expenses and involves depreciation recapture rules when you sell the home.
Depreciation and the home sale implication
Under the regular method, you can deduct the depreciation of the portion of your home used for business. However, when you sell the home, you may owe depreciation recapture tax on the deductions taken — taxed at a maximum of 25%. This means the regular method's benefit is partly deferred to a future tax liability rather than purely saved. The simplified method avoids depreciation recapture entirely. If you plan to sell your home and have held it long enough to use the primary residence capital gains exclusion ($250,000 single / $500,000 married), the depreciation recapture issue deserves careful analysis with a CPA before you commit to the regular method.