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Deductions Nov 20, 2025 7 min read
The Home Office Deduction Explained
Learn the two methods for calculating your home office deduction and which one saves you more money.
The home office deduction is a valuable tax break for anyone who uses a part of their home exclusively and regularly for business.
Regular Method
Calculate the percentage of your home used for business (e.g., 150 sq ft office in a 1,500 sq ft apartment = 10%). Deduct 10% of your rent/mortgage interest, utilities, insurance, and repairs.
Simplified Method
Deduct $5 per square foot of your home office, up to 300 square feet ($1,500 maximum). This requires less paperwork but often yields a smaller deduction.
TaxWatch helps you compare both methods to see which one saves you more.