{
  "id": "home-office-deduction",
  "version": "98be953e8d7e",
  "status": "published",
  "name": "Home Office Deduction Calculator",
  "question": "What is my home office deduction?",
  "summary": "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.",
  "category": "finance",
  "subcategory": "tax-and-pay",
  "url": "https://www.acalculator.org/finance/home-office-deduction-calculator",
  "markdown": "https://www.acalculator.org/finance/home-office-deduction-calculator.md",
  "kind": "function",
  "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.",
  "assumptions": [
    "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 $1 trillion.",
    "An estimate, not tax advice."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "area": {
        "title": "Office area (square feet)",
        "description": "Square feet of the part of your home you use regularly and only for your business.",
        "type": "number",
        "exclusiveMinimum": 0,
        "maximum": 10000000
      },
      "home": {
        "title": "Whole home (square feet)",
        "description": "Square feet of your whole home, for the regular method’s business-use percentage.",
        "type": "number",
        "exclusiveMinimum": 0,
        "maximum": 10000000
      },
      "income": {
        "title": "Business profit before this deduction",
        "description": "Gross income from the business minus its other expenses, before the home office deduction (Schedule C line 29).",
        "type": "number",
        "x-unit": "USD",
        "minimum": -1000000000000,
        "maximum": 1000000000000
      },
      "mortgage": {
        "title": "Mortgage interest (optional)",
        "description": "Deductible mortgage interest on your home for 2026, whole home.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "taxes": {
        "title": "Real estate taxes (optional)",
        "description": "Real estate taxes on your home for 2026, whole home.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "rent": {
        "title": "Rent (optional)",
        "description": "Rent you paid for your home in 2026, if you rent.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "costs": {
        "title": "Insurance, utilities, repairs (optional)",
        "description": "Whole-home insurance, utilities, repairs, security and other operating costs for 2026.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "direct": {
        "title": "Direct office expenses (optional)",
        "description": "Costs only for the office itself, such as painting or repairing that room.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "basis": {
        "title": "Home’s cost, not counting land (optional)",
        "description": "The smaller of what the home cost (plus improvements) and its value when you started the office, minus the land.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "start": {
        "title": "Office first used for business",
        "description": "The month you started using the office, for the first year of depreciation.",
        "type": "string",
        "enum": [
          "before",
          "1",
          "2",
          "3",
          "4",
          "5",
          "6",
          "7",
          "8",
          "9",
          "10",
          "11",
          "12"
        ]
      }
    }
  },
  "outputs": {
    "deduction": {
      "label": "Home office deduction",
      "description": "The larger of the simplified and the regular method deductions.",
      "format": "money"
    },
    "simplified": {
      "label": "Simplified method",
      "description": "$5 × the office area up to 300 square feet, no more than the business profit (not below $0).",
      "format": "money"
    },
    "regular": {
      "label": "Regular method",
      "description": "Business share of mortgage interest and taxes + operating expenses + depreciation, the last two up to the business profit left.",
      "format": "money"
    },
    "best": {
      "label": "Larger deduction",
      "description": "Which method gives the larger deduction.",
      "format": "text"
    },
    "percent": {
      "label": "Business-use percentage",
      "description": "Office area ÷ whole home area × 100.",
      "format": "percent"
    },
    "depreciation": {
      "label": "Depreciation (regular method)",
      "description": "Home cost without land × business-use percentage × the Table 2 percentage for 2026.",
      "format": "money"
    },
    "carryover": {
      "label": "Carryover to 2027 (regular method)",
      "description": "Operating expenses and depreciation the business profit limit held back.",
      "format": "money"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "area": 200,
      "home": 2000,
      "income": 40000,
      "mortgage": 12000,
      "taxes": 4000,
      "costs": 5000,
      "basis": 300000,
      "start": "before"
    },
    "outputs": {
      "deduction": 2869.2,
      "simplified": 1000,
      "regular": 2869.2,
      "best": "Regular method",
      "percent": 10,
      "depreciation": 769.2,
      "carryover": 0
    },
    "text": "With a 200 square foot office in a 2,000 square foot home, your 2026 home office deduction is $2,869.20."
  },
  "examples": [
    {
      "given": {
        "area": 200,
        "home": 2000,
        "income": 40000,
        "mortgage": 12000,
        "taxes": 4000,
        "costs": 5000,
        "basis": 300000,
        "start": "before"
      },
      "expect": {
        "simplified": 1000,
        "percent": 10,
        "depreciation": 769.2,
        "regular": 2869.2,
        "deduction": 2869.2,
        "best": "Regular method",
        "carryover": 0
      },
      "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; Worksheet To Figure the Deduction for Business Use of Your Home, Parts 1 to 4; Table 2 (39-year depreciation), https://www.irs.gov/publications/p587 (Table 2: 2.564% after the first year); hand calculation in content.mdx; Python 3 check in docs/progress/WP-142/xcheck.py"
    },
    {
      "given": {
        "area": 400,
        "home": 1600,
        "income": 30000,
        "rent": 24000,
        "costs": 3600,
        "start": "before"
      },
      "expect": {
        "simplified": 1500,
        "percent": 25,
        "regular": 6900,
        "deduction": 6900,
        "depreciation": 0
      },
      "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; Worksheet To Figure the Deduction for Business Use of Your Home, Parts 1 to 4; Table 2 (39-year depreciation), https://www.irs.gov/publications/p587; hand calculation in content.mdx; Python 3 check in docs/progress/WP-142/xcheck.py"
    },
    {
      "given": {
        "area": 300,
        "home": 1500,
        "income": 2000,
        "mortgage": 9000,
        "taxes": 3000,
        "costs": 4000,
        "direct": 250,
        "basis": 250000,
        "start": "7"
      },
      "expect": {
        "simplified": 1500,
        "regular": 2400,
        "depreciation": 588.5,
        "carryover": 1638.5,
        "deduction": 2400
      },
      "source": "IRS Publication 587 (2025): Simplified Method Worksheet; Worksheet To Figure the Deduction for Business Use of Your Home, Parts 1 to 4; 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%); hand calculation in content.mdx; Python 3 check in docs/progress/WP-142/xcheck.py"
    },
    {
      "given": {
        "area": 150,
        "home": 1500,
        "income": 20000,
        "start": "before"
      },
      "expect": {
        "simplified": 750,
        "regular": 0,
        "deduction": 750,
        "best": "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); Python 3 check in docs/progress/WP-142/xcheck.py"
    }
  ],
  "sources": [
    "IRS, Simplified option for home office deduction (reviewed 02-Mar-2026): $5 a square foot up to 300 square feet; home-related itemized deductions in full on Schedule A; no depreciation; the gross income limit; no carryover of the excess. https://www.irs.gov/businesses/small-businesses-self-employed/simplified-option-for-home-office-deduction (retrieved 2026-10-19)",
    "IRS, Publication 587 (2025), Business Use of Your Home: who qualifies; the Simplified Method Worksheet; the Worksheet To Figure the Deduction for Business Use of Your Home (Part 1 business percentage, Part 2 deduction limit in the order mortgage interest and taxes, operating expenses, depreciation, Part 3 depreciation, Part 4 carryovers); Table 2, first-year percentages for 39-year property. https://www.irs.gov/publications/p587 (retrieved 2026-10-19)",
    "IRS, Publication 946 (2025), How To Depreciate Property, Table A-7a: nonresidential real property, 39 years, straight line, mid-month convention (2.564% for years 2 to 39). https://www.irs.gov/publications/p946 (retrieved 2026-10-19)"
  ],
  "related": [
    "self-employment-tax",
    "qbi-deduction",
    "section-179",
    "mortgage-interest-deduction"
  ],
  "changelog": []
}