You work from the spare room every day, and every April the home office line stays blank because you are not sure which method to use or what to put in it. Enter your square footage and your yearly home costs to see the figure under the simplified method and the regular method side by side. Free, and no signup needed.
Is this you?
If two or more sound familiar, start with the numbers below, then read the eligibility rules underneath before you decide anything.
These boxes are filled in with an example home, not a real one. Replace each number with your own.
1. Your space
Measure length times width. Both methods start here.
Only the part used regularly and only for the business.
2. Yearly home costs (regular method only)
Whole-year figures for the entire home. The calculator takes the business share for you.
Mortgage interest only, not the principal part of the payment.
Homeowners only. Enter the business-use figure your accountant or Form 8829 Part III gives you. This tool does not work it out.
Before you use either number
Both figures are before the gross income limit. The IRS caps the home office deduction at the gross income from the business use of your home, reduced by your other business expenses, so a year with little or no business profit can reduce it or wipe it out. Under the regular method the excess can be carried to the next year. Under the simplified method it cannot.
The space also has to qualify: used regularly, used only for the business, and your principal place of business (or a place where you meet clients or customers in the normal course of business). This calculator does not decide whether you qualify or what you can deduct. An accountant can confirm that for your situation.
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Most people who work from home and never claim it are not ignoring the money. They stop at the first hard question: which method, which rooms count, what the square footage is, whether it is safe. Each question is small, but together they are enough to push the line to next year, and the year after.
The two methods answer very different questions. The simplified method needs only your office area. The regular method needs your office area, your home area and a year of home bills, and it produces a figure tied to what your home actually costs. Seeing both on your own numbers is usually what settles which one is worth the paperwork.
| Simplified method | Regular method | |
|---|---|---|
| How it is worked out | $5 per square foot of the office | Business share of actual home costs |
| Area limit | 300 square feet, so at most $1,500 a year ($5 times 300) | No square foot limit |
| Business percentage | Not used | Office area divided by the area of the home |
| Depreciation | None | Business part of the home, for owners |
| Mortgage interest and property tax | Claimed in full on Schedule A if you itemize | Business share goes in the home office figure |
| Over the gross income limit | Cannot be carried over | Can be carried to the next year |
| Form for a Schedule C filer | Not Form 8829 | Form 8829 |
Sources, checked September 21, 2026: the IRS page Simplified option for home office deduction (the $5 rate, the 300 square foot limit, no depreciation, Schedule A treatment, no carryover); Publication 587, Business Use of Your Home (2025) (the business percentage, the gross income limit and carryover, the use tests); and the Instructions for Form 8829 (2025). The IRS pages do not print the $1,500 figure; it is the $5 rate times the 300 square foot limit. Confirm the figures for your tax year at irs.gov before you file.
business percentage = office area / home area
simplified method = $5 x office area, with the area capped at 300
regular method = business percentage x yearly home costs + your depreciation figure
The yearly home costs are the ones you enter: rent or mortgage interest, utilities, insurance, general repairs and, if you add it, property tax. Depreciation is added as you enter it, because working it out needs your home's basis and the value of the land, which the IRS form walks through and this tool does not. Both results are shown before the gross income limit.
Costs that are only for the office itself, such as painting that one room, are treated differently from whole-home costs in Publication 587, so they are not included here. Ask your accountant how to handle them.
Publication 587 sets out the use tests. The area has to be used only for your trade or business and used for it on a regular basis. It also has to be your principal place of business, a place where you meet clients or customers in the normal course of business, or a separate structure used for the business. Doing your admin and management work at home can count as principal place of business when there is no other fixed location where you do substantial admin work.
The IRS simplified option page also notes that employees can no longer claim a home office as a miscellaneous itemized deduction for tax years beginning after 2017, whichever method they would use. This calculator is written for people who are self-employed.
According to the IRS, you can use either method for any tax year, but once you have chosen a method for a year you cannot change it for that same year. The side by side figure above is a starting point for that conversation with your accountant, not the answer to it.
Gather the measurements first, since both methods need them, then a year of rent or mortgage interest, utility, insurance and repair bills. Keep them with a sketch or photo of the office. If earlier years went unclaimed, ask your accountant whether anything can still be done about them before you assume either way.
If you drive for the business as well, the mileage calculator works out that figure at the current IRS rate.
Home costs are easier to total in April when business expenses are recorded as they happen through the year. Billbooks keeps expenses and receipts alongside your invoices if you want one place for them.
If you also drive for work, the free mileage log template records each trip as it happens, which is the record the mileage deduction calculator needs.
Working for yourself? These guides go further:
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