Calculate your 2025 home office deduction using both the Simplified Method ($5/sq ft, max 300 sq ft) and the Regular (Actual Expense) Method. The calculator automatically identifies which method gives you the larger deduction.
There are two ways to value a home office. The simplified method deducts a flat $5 per square foot of office space, up to 300 square feet — a maximum of $1,500 — with no depreciation and no later recapture. The regular method (Form 8829) deducts the business-use percentage of actual home expenses: mortgage interest or rent, property tax, utilities, insurance, repairs, and depreciation on the portion of the home used for business. The business-use percentage is usually the office square footage divided by the home’s total square footage.
Either way, the space must be used regularly and exclusively for business, and it must be your principal place of business (or a place you regularly meet clients, or a separate structure). Since the Tax Cuts and Jobs Act — a suspension OBBBA made permanent — only self-employed taxpayers can claim the deduction; W-2 employees cannot, even if they work from home.
A freelancer uses a 200-square-foot room exclusively as an office in a 2,000-square-foot home (10% business use). Under the simplified method the deduction is 200 × $5 = $1,000. Under the regular method, if total home expenses (rent, utilities, insurance, etc.) are $24,000 for the year, the deduction is 10% × $24,000 = $2,400, plus depreciation if the home is owned — so the regular method is larger here, at the cost of more recordkeeping and depreciation recapture on a later sale.
“Exclusive use” is strict: a guest room or kitchen table used part-time for work does not qualify. The deduction cannot exceed the gross income from the business; under the regular method any disallowed amount carries forward, but the simplified method’s unused portion is lost. If you own the home and use the regular method, the depreciation you claim (or could have claimed) is subject to recapture as gain when you sell. You can switch between the simplified and regular methods from year to year, but not within the same year.
$5 per square foot of qualifying office space, up to 300 square feet, for a maximum of $1,500. It requires no expense tracking and creates no depreciation recapture, but it may be smaller than the regular method.
No. Only self-employed individuals (and certain statutory employees) can claim it. The deduction for employee home-office and other unreimbursed expenses is suspended through the TCJA and made permanent by OBBBA.
The area must be used only for business (no personal use) and on a continuing basis, not occasionally. A clearly defined room or partitioned area used solely for the business meets the test; mixed-use space does not.