Compare Simplified Method vs Actual Expenses. AlphaTax shows which saves you more money.
The home office deduction lets you deduct a portion of your home expenses for business use. The IRS offers two methods: Simplified ($5/sq ft, max $1,500) or Actual Expenses (percentage of real costs). Most people default to Simplified because it's easier—but Actual Expenses often saves more. AlphaTax calculates both methods and recommends whichever maximizes your deduction.
Square footage of your home office and total home size.
Rent/mortgage, utilities, insurance, repairs, and other home costs.
View Simplified Method deduction vs Actual Expenses deduction side-by-side.
AlphaTax recommends whichever method saves you more with clear documentation.
Many freelancers use Simplified Method and miss hundreds or thousands in deductions.
See exactly how each method is calculated and why one is higher.
Home expenses you track flow automatically into the Actual Expenses calculation.
Generate reports showing your calculation method for tax filing or audit support.
See how different users benefit from this feature.
“200 sq ft office, $3,000/month rent”
Actual Expenses ($4,800 deduction) beats Simplified Method ($1,000)—save $950 more in taxes.
“150 sq ft office, $1,500/month mortgage”
Simplified Method ($750) is close to Actual ($820)—use Simplified for easier documentation.
“300 sq ft (max for Simplified), significant utilities”
Actual Expenses method captures high utility costs, saving $1,200 more than Simplified.
| Alternative | Limitation | AlphaTax Advantage |
|---|---|---|
| TurboTax/H&R Block | Ask which method you want—assume you've already calculated both | Calculates both methods automatically and recommends the better option |
| IRS Form 8829 | Complex form for Actual Expenses method, easy to make mistakes | Guided calculation that generates accurate Form 8829 data |
| Defaulting to Simplified | Leaves money on the table if Actual Expenses are higher | Know for certain which method saves more before choosing |
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