I like option 2 because you can make a cute office nook.

Not number two. Number one gives more privacy to a guest using that powder room.

Can you post the entire plan?

Is that bath near the garage also for your guests. It looks like there is another half bath showing in option 2.

That's the space we have to work with (remodel) - not a guess bath. It is a half bath that serve the main floor - no bedrooms.

Neither of these options are ideal. Option one gives much more privacy for the powder room but is an awkward transition from entry/coats to the rest of the house. Where do guests go when they enter? There's no clear path.
Option two is a no go. The bath should never be accessed so close the entry of it can be avoided. Also same transition problem as option one.
I would suggest hiring an architect to help you with design options that make sense for the flow of the entire home and not just focusing on the entry.

Maybe you can switch the office and the powder room?

ROGUE - thanks. When you enter the main door you stay left (about 10-15') and you enter the living on the left and kitchen on the right. The only reason for the guest to go back the other direction is to actually go to the bathroom.

Separate foyer and powder in option two with a cased opening. Will give some visual and spatial separation.

Is the front door set further in the angle as shown in option 1 or closer to option 2? Can you move the location of the front door flush with the front of the house so it doesn't face the wall? Or is that set up intentional because you have artwork or some other feature you'll be showcasing on that wall?

I actually like a powder room by the entry. Once guests are in, it's a rather secluded spot. I'd like option 1 if you can add a window next to the front door in the bath. The bath looks like it might be a little dark hole. The bench (or drop off area for shoes and coats) is hidden from the entry, but I think I'd decrease the size of that and make the bath a bit larger.

Option 2 if you move the door to the garage to the other side of the bath, and relocate the closet to where the door is (take out the closet walls) It opens up the entry more. Just ideas...

Let us know what you end up with!