Home Office Deduction Calculator (IRS Simplified Method)
Under the simplified method you skip tracking rent, utilities and depreciation for your office. You multiply the space you use for business by $5 a square foot, with no more than 300 square feet counted. This calculator follows the steps in IRS Publication 587, including its rule for an office used only part of the year or a change in size.
Estimate only, not tax advice. It assumes your space already qualifies (used regularly and exclusively for business, and your principal place of business or a place where you meet clients). The IRS says employees can no longer deduct a home office as an employee business expense, even with the simplified method; the deduction is for self-employed people and some partners. Our home office deduction guide covers who qualifies. Not covered here: daycare space used regularly but not exclusively (the $5 rate is reduced), space shared with another business, rental use, moving homes during the year, and splitting space in a qualified joint venture. Publication 587 has worksheets for those.
This calculator needs JavaScript turned on. It runs entirely in your browser: nothing you type is sent anywhere or stored, and the page sets no cookies.
Your simplified-method deduction
| Average monthly allowable area (max 300 sq ft) | — |
|---|---|
| Area × $5 | — |
| Gross income limit | — |
| Deduction (the smaller amount) | — |
Formulas used
- Allowable area each month = the square feet used for business, but no more than 300, and 0 for any month with fewer than 15 days of business use (Pub. 587, part-year use or area changes).
- Average monthly allowable area = the 12 monthly figures added up, divided by 12. If you used the same space all year, this is simply your square footage (up to 300).
- Tentative deduction = average allowable area × $5 (so at most 300 × $5 = $1,500).
- Gross income limit = gross income from the business use of the home − business expenses not related to the use of the home. If that is zero or less, there is no deduction for the year. Your deduction is the smaller of the tentative deduction and this limit.
Worked examples (from Publication 587)
- Started mid-year: Jay began using 420 square feet on July 20. July has fewer than 15 days of use, so it counts as 0; August through December count as 300 each (the cap). Average: 1,500 ÷ 12 = 125 square feet, so the deduction is 125 × $5 = $625. Enter 0 for January–July and 420 for August–December.
- Space grew: Jessie used 100 square feet from April 20 and 330 square feet from August 5. April counts as 0; May–July are 100; August–December are 300. Average 150 square feet: $750.
- Moved: Guadalupe used 300 square feet through July 16, then moved and used actual expenses (Form 8829) for the new home. For the first home: 300 for January–July, 0 after. Average 175 square feet: $875.
Simplified vs. regular method: what changes
- With the simplified method you can't also deduct actual home expenses or depreciation for the office part of the home; that depreciation is treated as zero for the year. Mortgage interest and real estate taxes are treated as personal expenses (deductible on Schedule A if you itemize).
- You can still deduct business expenses that aren't about the home itself, and depreciation on furniture and equipment.
- Any amount over the income limit is simply lost under the simplified method; it can't be carried over. Under the regular method (Form 8829), disallowed amounts carry forward.
- You choose the method each year on a timely filed original return, and the choice for that year can't be changed afterward.
Sources
- IRS: Publication 587, Business Use of Your Home (simplified method, part-year averaging, gross income limit, examples)
- IRS: Simplified option for home office deduction ($5 per square foot, 300 square feet maximum; employees not eligible)
- IRS: Topic no. 509, Business use of home
- IRS: Revenue Procedure 2013-13 (the simplified method)
Sources checked October 29, 2026.