Home office deduction calculator
Two legal ways to deduct the room you work from: the simplified method (five dollars a square foot, no receipts) and the actual method (real expenses times your business-use share). Renters with high housing costs are usually leaving money on the simplified table.
Results
Better method for youActual expenses
- Simplified ($5/sq ft, capped at 300)
- $750
- Actual method
- $3,600
- Business-use share of the home
- 15%
- Difference
- $2,850
Estimate
workingfigures.com/calculators/home-office-deduction-calculator
The formula
Simplified = office sq ft (max 300) × $5, capped at $1,500. Actual = annual home expenses × (office ÷ home sq ft). Same rules 2025; you pick one method per year.
What this ignores
Depreciation for homeowners (adds to the actual method but complicates a future sale), the income limit (deduction cannot exceed business profit), and audit posture: the actual method needs receipts and a defensible exclusive-use space.
FAQ
- Does claiming a home office trigger audits?
- The old fear is mostly outdated: millions claim it legitimately. The honest requirements are exclusivity and regularity. A dedicated desk area qualifies; the sofa does not. Photos and a floor sketch are cheap insurance.
- I rent. Which method wins?
- Usually actual: rent is fully includable, so a 15-20% business share of a city rent beats $1,500 fast. Run both here; the gap is often thousands.
- Can I switch methods between years?
- Yes, year to year (homeowner depreciation adds wrinkles). Many freelancers use simplified in low-expense years and actual when housing costs jump. Compute both every year; it takes a minute.