Home Office Tax Deduction Calculator
Compare Form 8829's simplified method to the actual expense method side by side. See which one saves more tax, with a full breakdown of every line.
Calculator
Your home office
Do you rent or own?
Indirect expenses (whole home, annual)
These get multiplied by your business percentage. Enter actual annual costs for the whole home.
Direct office expenses (annual)
100% deductible: things spent only on the office (e.g. painting just the office, business-only phone line).
Income and tax rate
The deduction can't exceed your business net income. Excess actual-method deduction carries forward.
Federal + state + SE tax (~14.13%). For most: 30 to 45%.
Simplified method
$5 per square foot, max 300 sqft.
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Tax savings: -
Actual method (Form 8829)
Indirect × business % + direct.
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Tax savings: -
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Show all the math - click to expand
Simplified breakdown
Actual breakdown
Estimates only. This calculator handles the core Form 8829 math: business percentage, indirect/direct expenses, income limit, simplified comparison, and tax savings. It doesn't model the excess mortgage interest worksheet (line 10b), casualty losses, day-care use, or the mid-month depreciation convention. Self-employed only. Consult IRS Pub 587 and a CPA before filing.
Simplified vs actual: how to choose
The IRS gives self-employed home-office workers two options. Both deduct the same kind of cost - using part of your home for business - but they get there very differently.
Simplified method
$5 per square foot of office space, up to 300 square feet, for a maximum deduction of $1,500. No receipts. No depreciation. You file it on Schedule C line 30 and you're done. The downside: small offices and low office percentages make this thin.
Actual expense method (Form 8829)
Compute your business percentage (office sqft divided by total home sqft), then multiply your indirect home expenses (rent or mortgage interest, utilities, insurance, repairs, HOA, depreciation) by that percentage. Add direct expenses (things spent only on the office) at 100%. The total flows to Schedule C line 30.
Actual usually wins for owners with significant mortgage interest and depreciation, and for anyone with a large office and high utility bills. The price you pay is record-keeping: you need receipts and a clean accounting of what's office-only versus shared.
The income limit
Either method is capped at your business net income for the year. The actual method lets you carry forward unused deduction to future years (line 43 of Form 8829). The simplified method does not - if you can't use it, you lose it. For most self-employed remote workers, that gap alone is worth thinking about.
A note on depreciation recapture
If you own your home and take actual-method depreciation, the IRS will "recapture" that depreciation as ordinary income when you sell the home, up to a 25% rate. This isn't a reason to avoid the deduction - the up-front tax savings almost always beat the future recapture - but it's a reason not to claim depreciation you didn't actually take. Talk to a CPA before you file the first year you switch to actual.
Frequently asked questions
Who can claim the home office deduction?
What are the eligibility requirements?
Simplified or actual method - which one wins?
Can the deduction create a business loss?
What about depreciation if I own my home?
Does this calculator handle every line of Form 8829?
Where do I claim the deduction?
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