Home Office Deduction Calculator Formula
Understand the math behind the home office deduction calculator. Each variable explained with a worked example.
Formulas Used
Home Office Deduction
deduction = min(office_sqft, 300) * 5Tax Savings
tax_savings = min(office_sqft, 300) * 5 * marginal_rate / 100Variables
| Variable | Description | Default |
|---|---|---|
office_sqft | Office Square Footage(sq ft) | 200 |
marginal_rate | Marginal Tax Rate(%) | 22 |
How It Works
Simplified Home Office Deduction
Deduction = Office Square Feet x $5 (max 300 sq ft = $1,500)
The simplified method requires no actual expense tracking. The regular method may yield a larger deduction if your expenses are high.
Note: Only available for self-employed individuals. W-2 employees cannot claim the home office deduction.
Worked Example
200 sq ft office, 22% tax rate.
office_sqft = 200marginal_rate = 22
- 01Deduction = 200 x $5 = $1,000
- 02Tax savings = $1,000 x 22% = $220
Ready to run the numbers?
Open Home Office Deduction Calculator