What is my home office deduction?
Type your office and home size and your business profit, and add your home costs for the regular method. The home office deduction calculator shows both IRS methods for self-employed people and which gives more.
- Home office deduction
- $2,869.20
With a 200 square foot office in a 2,000 square foot home, your 2026 home office deduction is $2,869.20.
- Simplified method
- $1,000.00
- Regular method
- $2,869.20
- Larger deduction
- Regular method
- Business-use percentage
- 10%
- Depreciation (regular method)
- $769.20
- Carryover to 2027 (regular method)
- $0.00
Home office deduction: $2,869.20. With a 200 square foot office in a 2,000 square foot home, your 2026 home office deduction is $2,869.20.
Home office deduction by office area (square feet)
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Works out the 2026 home office deduction for the self-employed by the simplified method ($5 a square foot, up to 300) and the regular method (Form 8829), and shows which is larger.
Example with the default inputs (Office area (square feet) 200, Whole home (square feet) 2,000, Business profit before this deduction $40,000.00, Mortgage interest (optional) $12,000.00, Real estate taxes (optional) $4,000.00, Insurance, utilities, repairs (optional) $5,000.00, Home’s cost, not counting land (optional) $300,000.00, Office first used for business Before 2026): With a 200 square foot office in a 2,000 square foot home, your 2026 home office deduction is $2,869.20.
Method: Simplified = $5 × min(office area, 300), no more than business profit (not below $0). Regular: share = office ÷ home; tier 1 = share × (mortgage interest + real estate taxes); operating = share × (rent + insurance, utilities, repairs) + direct costs, up to (profit − tier 1, not below $0); depreciation = home cost without land × share × Table 2 percent, up to what is left. Deduction = the larger method.
- Self-employed (Schedule C) for all of 2026, one home office used regularly and only for the business all year. Employees cannot take this deduction.
- Mortgage interest and real estate taxes are the amounts you could deduct on Schedule A (within the mortgage debt limit and the SALT limit); excess amounts, casualty losses and carryovers from 2025 are not included.
- Depreciation uses Publication 587 Table 2 (39 years): the month you first used the office for 2026, or 2.564% when you started before 2026 (and fewer than 39 years ago). Areas up to 10 million square feet; amounts up to $1 trillion.
- An estimate, not tax advice.
Worked examples
Each example is checked against the calculator on every build.
- Office area (square feet) 200, Whole home (square feet) 2,000, Business profit before this deduction $40,000.00, Mortgage interest (optional) $12,000.00, Real estate taxes (optional) $4,000.00, Insurance, utilities, repairs (optional) $5,000.00, Home’s cost, not counting land (optional) $300,000.00, Office first used for business Before 2026 gives Simplified method $1,000.00, Business-use percentage 10%, Depreciation (regular method) $769.20, Regular method $2,869.20, Home office deduction $2,869.20, Larger deduction Regular method, Carryover to 2027 (regular method) $0.00.Source: IRS, Simplified option for home office deduction ($5 a square foot, up to 300 square feet; no more than business income), https://www.irs.gov/businesses/small-businesses-self-employed/simplified-option-for-home-office-deduction; IRS Publication 587 (2025): Simplified Method Worksheet; Table 2 (39-year depreciation), https://www.irs.gov/publications/p587 (Table 2: 2.564% after the first year)
- Office area (square feet) 400, Whole home (square feet) 1,600, Business profit before this deduction $30,000.00, Rent (optional) $24,000.00, Insurance, utilities, repairs (optional) $3,600.00, Office first used for business Before 2026 gives Simplified method $1,500.00, Business-use percentage 25%, Regular method $6,900.00, Home office deduction $6,900.00, Depreciation (regular method) $0.00.Source: IRS, Simplified option for home office deduction ($5 a square foot, up to 300 square feet; no more than business income), https://www.irs.gov/businesses/small-businesses-self-employed/simplified-option-for-home-office-deduction (300 square feet × $5 = $1,500); IRS Publication 587 (2025): Simplified Method Worksheet; Table 2 (39-year depreciation), https://www.irs.gov/publications/p587
- Office area (square feet) 300, Whole home (square feet) 1,500, Business profit before this deduction $2,000.00, Mortgage interest (optional) $9,000.00, Real estate taxes (optional) $3,000.00, Insurance, utilities, repairs (optional) $4,000.00, Direct office expenses (optional) $250.00, Home’s cost, not counting land (optional) $250,000.00, Office first used for business July 2026 gives Simplified method $1,500.00, Regular method $2,400.00, Depreciation (regular method) $588.50, Carryover to 2027 (regular method) $1,638.50, Home office deduction $2,400.00.Source: IRS Publication 587 (2025): Simplified Method Worksheet; Table 2 (39-year depreciation), https://www.irs.gov/publications/p587 (Part 2 order: mortgage interest and taxes first, then operating expenses, then depreciation; Table 2 July 1.177%)
- Office area (square feet) 150, Whole home (square feet) 1,500, Business profit before this deduction $20,000.00, Office first used for business Before 2026 gives Simplified method $750.00, Regular method $0.00, Home office deduction $750.00, Larger deduction Simplified method.Source: IRS, Simplified option for home office deduction ($5 a square foot, up to 300 square feet; no more than business income), https://www.irs.gov/businesses/small-businesses-self-employed/simplified-option-for-home-office-deduction (150 × $5)
How it works
Simplified method (Publication 587, Simplified Method Worksheet):
- Area that counts = the office area, up to 300 square feet.
- Simplified deduction = $5 × the area that counts, but no more than your business profit before this deduction, and not below $0 (a profit of $0 or less gives $0).
Regular method (Publication 587 worksheet, the same steps as Form 8829):
- Business share = office area ÷ whole home area, as an exact fraction. Business-use percentage = business share × 100.
- Mortgage interest and taxes = business share × (mortgage interest + real estate taxes). This part is deductible even when it is more than the profit.
- Profit left = business profit − step 2, not below $0.
- Operating expenses = business share × (rent + insurance, utilities and repairs) + direct office expenses. Allowed = the smaller of the operating expenses and the profit left.
- Profit left after them = profit left − allowed operating expenses.
- Depreciation = home cost without land × business share × the 2026 percent ÷ 100. The percent is 2.564% when you first used the office before 2026, or Table 2's percent for the month of 2026 you started: January 2.461%, February 2.247%, March 2.033%, April 1.819%, May 1.605%, June 1.391%, July 1.177%, August 0.963%, September 0.749%, October 0.535%, November 0.321%, December 0.107%. Allowed = the smaller of the depreciation and the profit left after step 5.
- Regular deduction = step 2 + allowed operating expenses + allowed depreciation.
- Carryover to 2027 = (operating expenses − allowed) + (depreciation − allowed).
Empty home cost boxes count as $0.
Home office deduction = the larger of the simplified and the regular deductions. Larger deduction reads "Regular method", "Simplified method", or "Both methods give the same deduction" when they are equal.
The office cannot be larger than the whole home; the calculator gives no answer then ("The office cannot be larger than the whole home.").
Exact arithmetic. Every amount and area is read as the exact decimal you typed, each step is an exact fraction, and the results are rounded once to cents, half up (the percentage to 2 decimals). If any result (either method, the deduction, the percentage, the depreciation or the carryover) is not 0 but too small to show as a number, there is no answer: 'A result is too small to show as a number: check the amounts.'
Figures that change each year
| Figure | 2026 value | Source | Next update |
|---|---|---|---|
| Simplified rate | $5 a square foot | IRS simplified option page; Publication 587 | Set by the IRS (unchanged since 2013); check the 2026 Publication 587 |
| Most square feet (simplified) | 300 | IRS simplified option page; Publication 587 | Same |
| Depreciation, first year by month | 2.461% (January) to 0.107% (December) | Publication 587 Table 2 | Fixed by the 39-year recovery period |
| Depreciation, years 2 to 39 | 2.564% | Publication 946 Table A-7a | Fixed by the 39-year recovery period |
When the data is out of date
After April 15, 2027 the page keeps using these figures and says so above the result.
Assumptions
- Self-employed (Schedule C) all of 2026, one office used regularly and only for the business for the whole year. Not a daycare, and not an employee.
- Mortgage interest and real estate taxes are the amounts you could deduct on Schedule A; excess interest or taxes, casualty losses and carryovers from 2025 are left out.
- Depreciation: you first used the office in 2026 or fewer than 39 years ago, and the cost you type leaves out the land.
- Areas from just above 0 to 10 million square feet; amounts up to $1 trillion (profit may be below $0). An estimate, not tax advice.
Worked examples by hand
A 200 square foot office in a 2,000 square foot home, $40,000 of profit, $12,000 of mortgage interest, $4,000 of taxes, $5,000 of other costs, a $300,000 home cost, used before 2026. Simplified = 200 × $5 = $1,000. Regular: share = 10%; mortgage interest and taxes = 10% × 16,000 = $1,600; profit left = $38,400; operating = 10% × 5,000 = $500, all allowed; depreciation = 300,000 × 10% × 2.564% = $769.20, all allowed. Regular = 1,600 + 500 + 769.20 = $2,869.20, the larger.
A renter with a 400 square foot office in a 1,600 square foot apartment, $30,000 of profit, $24,000 of rent and $3,600 of other costs. Simplified = 300 × $5 = $1,500 (300 square feet at most). Regular: share = 25%; operating = 25% × (24,000 + 3,600) = $6,900, all allowed. The regular method gives $6,900.
A small profit: 300 square feet of 1,500, $2,000 of profit, $9,000 of interest, $3,000 of taxes, $4,000 of other costs, $250 of direct costs, a $250,000 home cost, first used in July 2026. Simplified = $1,500. Regular: share = 20%; interest and taxes = 20% × 12,000 = $2,400, more than the profit, so the profit left is $0; operating = 20% × 4,000 + 250 = $1,050, none allowed; depreciation = 250,000 × 20% × 1.177% = $588.50, none allowed. Regular = $2,400; carryover = 1,050 + 588.50 = $1,638.50.
No home costs typed: 150 square feet of 1,500, $20,000 of profit. Simplified = 150 × $5 = $750; regular = $0, so the simplified method gives the deduction.
Other questions people ask
How do you calculate the home office deduction?
There are two ways. The simplified method is $5 for each square foot of your office, up to 300 square feet, so at most $1,500. The regular method takes the business share of your actual home costs: office area ÷ home area × mortgage interest, real estate taxes, insurance, utilities and repairs, plus depreciation of that share of the home. Either way the deduction cannot be more than your business profit, except for the business share of mortgage interest and taxes.
Which method should I use?
Whichever gives the larger deduction, unless you value simple record keeping. The regular method usually wins with a large office share or high home costs; the simplified method wins for small offices and renters with low rent. You choose each year, but you cannot change the choice on an amended return.
Who can take the home office deduction?
Self-employed people who use part of their home regularly and only for their business, as their main place of business or to meet clients, or a separate structure used for the business. Employees cannot deduct a home office for 2018 and later years, even when they work from home.
What does the business profit limit do?
The deduction cannot be more than the gross income from the business minus its other expenses. Under the regular method the business share of mortgage interest and real estate taxes is deductible anyway; operating costs and then depreciation fill what is left of the profit, and anything over it carries to next year. Under the simplified method the excess is lost.
How is depreciation of a home office figured?
The office is nonresidential real property depreciated over 39 years. Multiply the cost of your home (or its value when you started the office, if lower), not counting the land, by the office share and by the percent for the year: 2.564% a year after the first year, or the Table 2 percent for the month you started (2.461% for January down to 0.107% for December).
Does the simplified method change my mortgage interest deduction?
Yes, in your favor if you itemize: with the simplified method all of your mortgage interest and real estate taxes stay on Schedule A, and there is no depreciation to recapture when you sell. With the regular method the business share moves to Form 8829 and the rest stays on Schedule A.