One division and one multiplication
The share is the work area divided by the area of the home. Every cost that applies to the whole home is then multiplied by it. That is the entire calculation, and the defaults on this page show what it looks like end to end: an 11 by 10 office is 110 square feet, a 4 by 2.5 closet holding files is another 10, and a 6 by 3 stretch of the dining table used for work 30 percent of the time contributes 5.4 of its 18. Together that is 125.4 square feet counted out of 1,600, which is 7.84 percent.
Apply 7.84 percent to $24,970 of rent, power, heat, internet and insurance and you get $1,957.02. Rent alone accounts for $1,692.90 of it.
Part-time space is a weighting, not a yes or no
A room used only for work and a corner of a table used some of the time are different situations, and treating them the same is where these calculations usually go wrong in one direction or the other. The page lets you put a percentage on each space so that the dining table contributes a fraction of its floor area rather than all of it or none of it.
What that fraction should be, and whether a part-time space should be counted at all, is not something arithmetic decides. It is a question about rules, and the rules are not this page to state.
Rounding that reconciles
Each cost is rounded to the cent on its own line and the total is the sum of those lines. That means the total on screen always adds up to the column above it, which is the property you want when the figures end up on a form or in a spreadsheet next to receipts.
It also means the total can sit a cent or two away from what you get by multiplying the grand total by the percentage. Both are defensible; only one of them adds up line by line, and that is the one shown.
Two numbers worth being careful about
The home area is the denominator of everything, and there is more than one way to measure it — with or without unfinished basements, garages, stairwells, or exterior wall thickness. Whichever measure you use, the work spaces have to be measured on the same basis, or the ratio compares two different things. A 200 square foot difference in the denominator moves a 7.8 percent share by half a point.
The other is what belongs in the cost list. It is for costs that apply to the whole home, which the share is applied to. Something bought for the work space alone does not get pro-rated — it goes in the direct field and is reported on its own line, unmultiplied.
Where this page stops
It stops at the arithmetic, and it stops firmly. Whether a space qualifies, which method you can use, what counts as exclusive use, whether a rate or a limit applies to you and what they are, and what any of it does to your return — all of that is decided by the IRS and by an accountant looking at your actual situation. Nothing here is tax advice, no rule or figure is stated, and the fields where a rate and a limit go are empty because this page will not fill them.
Questions people ask
Does this tell me what I can deduct?
No, and it is not designed to get close. It works out what fraction of your home a set of spaces represents and multiplies costs by that fraction. Whether any of those spaces qualifies for anything, which method applies to your situation, what counts as exclusive use, and what the resulting figure does on a return are decisions made by the IRS and by an accountant who knows your circumstances. This page states no rule, no rate, no threshold and no eligibility test, and none of it is tax advice.
How should I measure the home area?
On whatever basis you and your accountant are working to, and then measure the work spaces the same way. There is more than one convention — some include finished basements and some do not, some measure to interior faces and some to exterior — and the calculator has no view about which is right. What matters arithmetically is consistency, because the share is a ratio and comparing an area measured one way with an area measured another produces a number that means nothing. If you have a floor plan or an appraisal with a figure on it, using that one and measuring the rooms yourself is a common way to be inconsistent.
What does the work-use percentage do?
It scales the floor area of that space before it goes into the total. An 18 square foot stretch of table at 30 percent contributes 5.4 square feet. It is a weighting for a space that is not used for work all of the time, and it exists because entering such a space at its full area or leaving it out entirely are both wrong in different directions. What the correct percentage is, and whether a part-time space should be counted at all, is not an arithmetic question and the page does not answer it.
Why does the total differ by a cent from the percentage times the total?
Because every line is rounded to the cent individually and the total is the sum of those rounded lines. Rounding five numbers and adding them does not always give the same result as adding five numbers and rounding once. The version shown is the one where the column adds up, which is what you want when the figures sit next to receipts. The difference is never more than a fraction of a cent per line.
What goes in the direct costs field?
Anything spent on the work space and nothing else, for the year, which is not pro-rated and appears on its own line. The distinction is between a cost the whole home incurs — which the share is applied to — and a cost that exists only because of the work space. Getting the two mixed up is the most common arithmetic error in this whole exercise, in both directions: pro-rating something that belonged entirely to the office, or counting a whole-home bill in full. Which category a given expense actually falls into, and whether either is claimable, is a question for an accountant.