2026 tax year · US · Updated May 22, 2026

Home Office Deduction Calculator

The IRS gives you two ways to claim your home office: the Simple Method ($5/sqft) or the Actual Expense Method (prorating your rent, utilities, and mortgage). For most people, the "best" choice depends on the size of your office and the cost of your home. Run the numbers side-by-side below.

Space & Expenses

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The IRS requires the space to be used exclusively and regularly for business. These estimates for the 2026 tax year assume you are eligible to claim the deduction.

Comparison Result

Estimated Total Deduction

$2,940

Simplified Method ($5/sqft)200 sq ft × $5
$1,000
Actual Expense Method10.0% business-use ratio
$2,940
Recommended: Actual Expense Method

Using this method saves you approximately $1,940 more in total deductions this year.

Important Considerations

  • Depreciation: The actual method allows for home depreciation, but it can trigger recapture taxes when you sell the property.
  • Recordkeeping: The simplified method requires no receipts. The actual method requires you to keep documentation for every expense listed.
  • Carryover: If your business has a loss, actual expenses can often be carried forward to future years; simplified deductions cannot.

Which method should you choose?

The Simplified Method is meant to save you time. You don't have to keep receipts for electricity, rent, or maintenance. You simply measure your office square footage and multiply by $5. If your office is small (under 200 sq ft) and your rent or mortgage is relatively low, this is often the winner.

The Actual Expense Method is better if you have a large dedicated office or live in a high-cost area (like NYC, SF, or Miami). It requires more recordkeeping because you have to sum up your annual spending on rent, mortgage interest, utilities, and insurance, and then multiply by your office-to-home area ratio.

Frequently asked questions

Is the $5 per square foot rate still current for 2026?
Yes. The IRS simplified option remains at $5 per square foot of the portion of your home used for business, up to a maximum of 300 square feet ($1,500 total).
Can I switch between the simplified and actual method each year?
Yes, you can choose whichever method works best for you in a given tax year. However, if you use the actual method and claim depreciation, switching back to simplified in a later year requires specific reporting for the depreciation recapture.
What qualifies as an exclusive-use home office?
The space must be used ONLY for your business. A desk in a bedroom can qualify if that specific area is used only for work, but a kitchen table used for family meals would not meet the exclusive-use test.

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