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Home Office Deduction Calculator

Enter your office dimensions and home expenses to see your exact IRS deduction — simplified method ($5/sq ft) or regular method (actual expenses). Includes estimated federal + self-employment tax savings.

Where this fits

🧾 TaxTax StackGoing 1099FreelancersFounders

This tool lives inside Tax Stack + Going 1099 and is most useful for freelancers and founders.

SE Tax Rate15.3%
QBI Deduction20%
Quarterly DeadlinesApr · Jun · Sep · Jan

Office Space

Business-use percentage: 12.5%

The office must be used regularly and exclusively for business. A spare room you also use as a guest bedroom does not qualify.

$

The home office deduction cannot exceed your net business profit for the year.

Your deduction
$750
Simplified method
Est. tax savings
$222
Federal + half SE tax @ 29.65%

Method Comparison

Simplified
$750
150 sq ft × $5
Regular
$2,775
12.5% of actual expenses

IRS Requirements

  • 01Exclusive use — the space must be used solely for business, not mixed with personal activities.
  • 02Regular use — you must use it consistently throughout the year, not just occasionally.
  • 03Principal place of business — your home must be your main business location, or where you meet clients regularly.
  • 04Self-employed only — W-2 employees cannot deduct home office expenses (post-2018 TCJA).
1

Step 1 — Qualifying office area

qualifyingSqFt = min(officeSqFt, 300 sq ft IRS cap)

min(150, 300)

= 150 sq ft

Simplified method caps at 300 sq ft regardless of actual office size. Space must be used exclusively and regularly for business — a guest-room desk usually does not qualify.

IRS Pub 587, Simplified Option; Rev. Proc. 2013-13

2

Step 2 — Raw simplified deduction

deduction = qualifyingSqFt × $5/sq ft (max $1,500)

150 × $5

= $750

Flat $5 per qualifying square foot. No receipts required, no depreciation, no recapture on sale — but no carryforward of unused deduction either.

Rev. Proc. 2013-13 §4.04

3

Step 3 — Net business income cap

finalDeduction = min(rawDeduction, netBusinessIncome)

min($750, $80,000)

= $750

Income is sufficient to claim the full deduction — no cap applied.

IRC §280A(c)(5); IRS Pub 587 Simplified Option Worksheet

4

Step 4 — Federal income tax savings

incomeTaxSaving = deduction × federalRate (22% assumed)

$750 × 22%

= $165

Reduces taxable income on Schedule 1. 22% reflects the median freelancer marginal bracket (2024). Substitute your own rate from the income-tax-brackets tool for precision.

IRS Form 1040 Schedule 1; Rev. Proc. 2023-34

5

Step 5 — Self-employment tax savings (half of SE rate)

seTaxSaving = deduction × 15.3% × 50%

$750 × 15.3% × 0.5

= $57

The home office deduction reduces Schedule C net profit, which reduces the SE tax base. Effective SE saving on each $1 of deduction is ~7.65¢ (12.4% Social Security + 2.9% Medicare, halved because SE base = 92.35% of net profit and half of SE tax is itself deductible).

IRC §1401; IRS Schedule SE

6

Step 6 — Total tax savings

totalSaving = incomeTaxSaving + seTaxSaving

$165 + $57

= $222

Combined effective rate ~29.6% of every deduction dollar. Add state income tax (varies 0–13.3%) for your true savings.

Derived from IRS Form 1040 + Schedule SE flows

Key insight

Switching to the regular method could save you an extra $2,025 — worth doing if your actual expenses are high.

Use this result in →

Quarterly Taxes →SE Health Deduction →Mileage Deduction →

#ShowYourWork

Disclaimer

Based on IRS Publication 587 (2024). Tax rules change; consult a CPA before filing. The regular method calculation excludes depreciation recapture and carryforward rules.

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