Calculate your potential home office tax deduction using both the IRS simplified and standard methods. Determine which method offers you the greatest tax savings.
Your home office represents:
8.333
Simplified Method Deduction:
500
Total Annual Home Expenses:
0
Standard Method Deduction:
Recommended Deduction: 500
This is 500 more than the alternative method.
Monthly Equivalent: 41.667
The simplified method is often easier to calculate as it doesn't require tracking all home expenses. The standard method may yield a larger deduction if your actual expenses and business-use percentage are high.
The home office deduction allows eligible taxpayers to deduct certain home expenses related to the business use of their home. It helps reduce taxable income.
simplified = min(office_sqft,300) × $5; standard = (office_sqft / total_home_sqft) × total_allowable_home_expenses.
simplified = min(office_sqft,300) × $5; standard = (office_sqft / total_home_sqft) × total_allowable_home_expenses
Let's consider an example with an office of 150 sq ft, a home of 1500 sq ft, and $10,000 in total home expenses.
This calculator simplifies the process, helping you determine your maximum eligible deduction.
You must regularly and exclusively use a portion of your home for business. It must also be your principal place of business.
No, employees cannot claim this deduction. It's generally for self-employed individuals or independent contractors.
