Remote Work Savings Calculator
Calculate how much you save working from home. Factor in commute, meals, clothing, and office costs to see your total annual remote work savings.
Home Office Deduction Calculator
Calculate your home office tax deduction using simplified or regular method. See eligible square footage deduction and potential tax savings.
sq ft
sq ft
Rent/mortgage, utilities, insurance, etc.
$
Including SE tax effect
%
Simplified Method⧉
$1,000.00
200 sq ft × $5
Regular Method⧉
$3,200.00
13.33% business use
Better Method⧉
Regular
$3,200.00
Annual Tax Savings⧉
$960.00
At 30.00% rate
Monthly Deduction⧉
$266.67
Average monthly benefit
Expense per Sq Ft⧉
$16.00
Whole home cost per area
Method Comparison
| Method | Annual Deduction | Tax Savings | Monthly |
|---|---|---|---|
| Simplified ($5/sq ft) | $1,000.00 | $300.00 | $83.33 |
| Regular (% of expenses) | $3,200.00 | $960.00 | $266.67 |
Regular method saves $2,200.00 annually
Business Use Breakdown
Office Space
13.33%
Remaining Home
86.67%
Planning notes, formulas, and examples
About the Home Office Deduction Calculator
The home office deduction allows self-employed individuals to deduct a portion of their home expenses—rent, mortgage interest, utilities, insurance, and maintenance—based on the percentage of their home used exclusively for business. It's one of the most valuable deductions for freelancers and small business owners.
The IRS offers two methods: the simplified method ($5 per square foot, up to 300 sq ft, max $1,500) and the regular method (actual expenses × business-use percentage). The regular method often yields a larger deduction but requires detailed record-keeping.
For federal returns, self-employed taxpayers and independent contractors can generally evaluate the deduction under the home-office rules, while unreimbursed W-2 employee home-office expenses are not allowed on the federal return under the post-TCJA framework. This calculator computes both methods side by side so you can compare them before preparing the return.
When This Page Helps
The home office deduction can save self-employed workers $500–$5,000+ in taxes annually. This calculator compares the simplified and regular methods side by side so you can see which approach produces the larger deduction and what records the regular method would require.
How to Use the Inputs
- Enter your home office square footage.
- Enter your total home square footage.
- Enter your total annual home expenses (mortgage interest, rent, utilities, insurance, repairs).
- Compare the simplified ($5/sqft) and regular (actual expense) method results.
- Choose the larger deduction for your tax return.
Formula used
Simplified: Deduction = min(Office Sq Ft, 300) × $5
Regular: Business% = Office Sq Ft / Home Sq Ft
Regular Deduction = Total Home Expenses × Business%Example Calculation
Result: Regular method: $3,200 vs Simplified: $1,000
Simplified: 200 sq ft × $5 = $1,000. Regular: business-use ratio = 200/1,500 = 13.33%. Deduction: $24,000 × 13.33% = $3,200. The regular method yields $2,200 more. At a 25% tax rate, that's $800 in additional tax savings.
Tips & Best Practices
- The space must be used regularly and exclusively for business.
- A spare bedroom used as an office qualifies; a living room desk usually doesn't.
- The simplified method is easier but caps at $1,500.
- The regular method requires keeping receipts for all home expenses.
- Include utilities, insurance, repairs, and depreciation in regular method.
- W-2 employees cannot claim this deduction on federal taxes.
Choosing Between Methods
The regular method usually yields a larger deduction when your home office is over 200 sq ft and total home expenses exceed $7,500/year. The simplified method is better for small offices or when you want simplicity and don't have significant home expenses.
Common Mistakes to Avoid
Don't claim a space that isn't exclusively used for business. A bedroom that doubles as a guest room doesn't qualify. Don't include expenses for a separate structure (like a detached garage) unless it meets the same exclusive-use test. Keep detailed records if using the regular method.
State Tax Implications
Many states allow a similar home office deduction. Some states still allow unreimbursed employee business-expense treatment in situations where the federal return does not. Check your state's current rules before assuming the federal and state treatment match.
Sources & Methodology
Last updated:
Frequently Asked Questions
Self-employed individuals, independent contractors (1099), and small business owners who use a dedicated space in their home regularly and exclusively for business. The space must be your principal place of business, or where you regularly meet clients. W-2 employees cannot claim this deduction federally.
The simplified method allows $5 per square foot of home office space, up to 300 square feet ($1,500 maximum). No actual expense tracking is needed. You still deduct mortgage interest and property taxes on Schedule A separately. It's simpler but often yields a smaller deduction.
Eligible expenses include: mortgage interest (or rent), property taxes, homeowner's insurance, utilities (electric, gas, water), internet, home repairs and maintenance, and home depreciation. Multiply total expenses by the business-use percentage (office sq ft / home sq ft).
Yes, the business-use percentage of your internet bill is deductible under the regular method. For phone, deduct only the business-use percentage. If 30% of your internet use is business-related, deduct 30% of the bill. Under the simplified method, these cannot be added.
Renters can use the regular method with rent replacing mortgage interest. The calculation is the same: total rent × business-use percentage. For a $2,000/month rent with 15% business use: $2,000 × 12 × 15% = $3,600 deduction.
Yes. The home office deduction reduces your net self-employment income, which in turn reduces both income tax and self-employment tax. On a $3,000 deduction at a combined 35% rate (income + SE tax), you save approximately $1,050.