Should I use the simplified home office deduction?

If you work from home, you get a big break on your taxes. The IRS offers two ways to claim this write off -- the simplified method, and the regular expenses method. You can pick one or the other, but not both.

Option 1: Simplified method - you get $5 per square foot of your home office, up to $1,500.

Option 2: Regular method - you take a portion of all home-related expenses.

So... which method saves me more money on taxes?


Case 1: Urban renters...

Let’s say you rent a 1 bedroom apartment in an urban environment. On average, that means you’re paying $800 per month for rent. On top of that, you’ve got to pay for wifi, renter’s insurance, and all of your utilities which adds up to at least $150 per month. In this case, you definitely shouldn’t take the simplified home office deduction:


Urban renter


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Case 2: Suburb homeowners…

Let’s say you own a 1 bedroom home in a suburban environment. Your home is worth $200,000 and of course you’re paying for wifi, renter’s insurance, and all of your utilities which is at least $150 per month. Turns out, you still shouldn’t take use simplified method:


suburban owner


Case 3: Rural homeowners…

Okay, now let’s say you own a home further from all the bustle. The home is less expensive and you’ve got lots of room and a separate 300 square foot room for your home office. Now, it starts to make more sense to use the simplified method. But still, not quite…


Rural Owner


Bottom line: Claiming home-related expenses is almost certainly better than using the simplified method (and Keeper does it for you!)


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Note: at Keeper, we care about helping you save on taxes. That leads us to generalize tax advice which ultimately cannot be completely generalized. Everyone's situation is different. Please drop a note above or reach out via email if you have questions.