Would suggest eliminating the small closet, centering the toilet on the wall it's currently shown on, install the vanity on the opposite wall and flip the door into the powder room so that the first thing you see when you open the door is the toilet. You can install cabinetry above the toilet for storage. Good luck!

Norwood, I think you meant to say, flip the door so the toilet ISN'T the first thing you see.

I would like to keep a closet as you can never have enough closets. Wonder if this would work although the width is more.

Combine the closet and the empty space next to it into one 2' deep, 5' wide closet, with the door opening from the top of the diagram. Put the vanity backing up to the new 5' closet wall. You'll probably need to shift the door down closer to the toilet.

@catbuilder - We cannot move the closet on the top or bottom walls.

@msjoan - Those are my thoughts too, but i wonder if it will feel like you are in a hole. I suppose can narrow down the closet to 18" and that would give 3' of width. But isn't it too deep though for toilet ?

Building codes usually require around 30" width for toilet space, so your 32" will probably meet code, but it might feel cramped when adding TP holder, etc. What are you planning to put in the 2-foot deep closet? I don't think the 42" depth of the toilet space is a problem.

I think we can make the closet 18" deep with 16" shelves. It's just a storage closet. that would give us 38" space for the toilet.