Who can claim the home office deduction
This deduction belongs on Schedule C — freelancers, independent contractors, and other self-employed filers whose workspace meets the IRS's twin tests: the space must be used regularly and exclusively for business. A spare bedroom that doubles as a guest room fails the exclusive-use test; a dedicated desk or room you use weekly for client work passes. W-2 remote workers cannot claim this deduction — employees may not deduct unreimbursed home-office costs, even when the employer requires you to work from home. The full rules live on the IRS home office deduction page.
How this calculator works
Both IRS methods always compute side by side — no mode toggle, no guessing. The simplified method pays $5 per square foot of office space, capped at 300 square feet and $1,500 per year, prorated for the months you actually used the space. The actual method multiplies your monthly rent or mortgage plus utilities and insurance by the office's share of the home (office square feet ÷ total square feet), then prorates by months used. The note under the result names the method that produces the larger deduction for your numbers.
The simplified method
Multiply office square feet by $5, cap the result at 300 square feet ($1,500 a year), then multiply by months used ÷ 12. No receipts, no utility bills, no depreciation schedule — you measure the room once and claim the number on Schedule C line 30. The IRS describes the election on its simplified option page. It is capped, so it wins mainly when your allocated housing costs are low relative to the cap.
The actual method
Total the real costs of running the space — rent (for renters), or mortgage interest, property taxes, insurance, and repairs (for owners) plus utilities — multiply by the business square-foot percentage, then prorate by months used. Owners also depreciate the office portion, which is calculated on Form 8829 and carried to Schedule C line 30. Actual expenses have no fixed cap, which is why they usually win for renters paying full rent and for owners with high housing costs. The trade-off is paperwork: every dollar needs a receipt.
When each method wins
Enter your office square feet, total home square feet, monthly rent or mortgage, monthly utilities plus insurance, and months used — the calculator runs both methods from those same inputs. The simplified method pays $5 per square foot of office space up to 300 square feet, so it wins when allocated housing costs are low relative to that cap: small offices, low-rent homes, or part-year use where the paperwork of the actual method is worth more than the extra deduction. The actual method multiplies real housing costs by the office share of the home with no fixed cap, so it usually wins for renters paying full rent and for owners with high housing costs, where the uncapped share overtakes the per-foot ceiling. Because rents, costs, and use change, run both every year and claim whichever produces the larger deduction for that year's numbers.
Go deeper
Our home office deduction guide covers eligibility traps, worked examples where each method wins, the depreciation recapture trap, and the records the IRS expects. To see how the deduction fits into the rest of your tax picture, pair it with the mileage deduction calculator, the tax set-aside calculator, and the hourly rate calculator.
Every figure above is hand-checked: the worked example was recomputed independently of the calculator code, and tax figures track 2026 IRS limits. How we check every page.