One hundred fifty square feet at $5 is a $750.00 deduction. On $80,000 of profit, single, that lowers federal tax by $172.88. The regular method, with actual expenses and depreciation, is not calculated.
Simplified deduction
$750.00
The simplified deduction is $750.00.
How the total splits
$5 a square foot, 300 square feet max. Regular method is not calculated.
| Simplified deduction | $750.00 |
|---|---|
| Federal tax saved | $172.88 |
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Deduction = $5 × business square feet, capped at 300 square feet and at net profit.
The IRS simplified option is $5 per square foot of the home used for business, and no more than 300 square feet. The space still has to be used regularly and exclusively for business. The option does not change who qualifies.
The deduction cannot exceed the profit from the business. This page subtracts it from the profit you type and reruns the 2026 federal tax, with simplified QBI on, to show the tax saved. It does not allocate rent, utilities, or depreciation, and it does not carry a loss forward.
| Deduction | $750.00 |
|---|---|
| Federal tax saved | $172.88 |
Three hundred square feet times $5 is $1,500. A larger room does not raise the simplified deduction. The regular method can be higher, and it can also be lower. This page does not compute the regular method.
Not for tax years after 2017. The IRS page says unreimbursed employee home-office expenses are not deductible, including under the simplified option. This calculator is for self-employed profit.
Yes. The simplified option uses the same regular-and-exclusive test as the regular method. A desk in a room the family also uses does not qualify. Daycare uses a different rule in Publication 587, and it is not on this page.