Home Office Deduction Calculator

How it is calculated

The tool gives one result at a time, depending on the method you select, not both side by side. First it finds the business share: business_pct = office_area ÷ home_area × 100. With the actual method (the default), deduction = annual_expenses × office_area ÷ home_area. With the simplified method, deduction = min(office_area, 300) × $5, so it tops out at $1,500 and the expenses figure does not change the result, although the field still has to be filled. The monthly figure is the deduction divided by 12. Both areas use the same unit (square feet in the simplified rule). No result appears if the office is larger than the home, an area is zero or negative, expenses are negative, or the method is not one of the two. This follows U.S. rules only; other countries have different or no such deduction.

Common mistakes

• Assuming the result shows both methods. It shows only the one selected, so run it once for each method and compare the deduction lines.
• Entering the room's size in square metres while the home area is in square feet, or the other way round. The ratio and the $5-per-square-foot rate both assume the same unit.
• Entering only the home office room's own costs as annual expenses. The actual method takes whole-home expenses (rent or mortgage interest, utilities, insurance) and applies the business share to them.
• Expecting the expenses field to matter for the simplified method. It is ignored there, and the deduction depends only on office size, capped at 300 sq ft.
• Counting space that is not used regularly and exclusively for work. The tool calculates from the area you enter and cannot check whether the space qualifies, so confirm the rules with a tax adviser.