Form 8829 - Expenses for Business Use of Your Home

Form 8829 - Expenses for Business Use of Your Home

Form 8829 is used to calculate the allowable expenses for the business use of your home, which are reported on Schedule C (Form 1040) for self-employed individuals. This form helps determine how much of your home-related expenses can be deducted based on the portion of your home used for business purposes.

When to Use Form 8829

• Use Form 8829 if you operate a business from your home and wish to claim actual expenses for the business use of your home.
• It is required if you are not using the simplified method for your home office deduction.
• Complete a separate Form 8829 for each home used for business during the year.

Eligibility Requirements

Your home office qualifies as your principal place of business if:

• You use it exclusively and regularly for administrative or management activities of your trade or business.
• You are not using the simplified method for your home office deduction.

Types of Expenses

Expenses are categorized into two types:

• Direct Expenses: These benefit only the business part of your home (e.g., painting or repairs to the business area). Enter 100% of these expenses in column (a).
• Indirect Expenses: These benefit both business and personal parts of your home (e.g., utilities, real estate taxes). Allocate these based on the percentage of business use.

Calculating Business Use Percentage

The percentage of your home used for business is determined by:

• The square footage used for business divided by the total square footage of your home.
• Alternatively, you can use time-based allocation if applicable.

Carryover of Unused Expenses

If you have expenses that cannot be deducted in the current year due to income limitations, you may carry them over to future years. For 2025, carryover amounts from 2024 Form 8829, line 43, are entered on line 25.

Reporting on Other Forms

• Enter gross income attributable to business use of your home on Form 8829, line 8, based on Schedule C, line 29, and any gains or losses from Forms 8949, Schedule D, or Form 4797.
• If you first used your home for business in 2025, report the basis and depreciation information on Form 4562, line 19j.

Special Considerations

• If you had a casualty loss related to your business home, complete a worksheet version of Form 4684 to determine deductible losses. Do not file this worksheet; keep it for records.
• For disaster-related losses, include only those attributable to federally declared disasters in column (b) of line 9.

Important Notes

• Do not include expenses not allocable to business use (e.g., personal property taxes not related to business area).
• If you operated your business only part of the year, deduct only expenses incurred during that period.

Source:

Form 8829 - Expenses for Business Use of Your Home

Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions before filing.