Updated October 19, 2026. Quick answer: Publication 587 is the IRS guide to deducting the business use of your home. It sets out the tests a space must pass, two ways to figure the deduction (actual expenses or the simplified method), daycare rules, and what happens when you sell the home. This edition is the one “For use in preparing 2025 Returns”.
Quick reference
| Item | As the IRS publication states it |
|---|---|
| Simplified method, prescribed rate (Using the Simplified Method) | $5 |
| Simplified method, area limit (Using the Simplified Method) | 300 square feet |
| Depreciating the business part of a home first used for business in 2025 (Depreciating Your Home) | 39 years |
| Home sale gain exclusion (Sale or Exchange of Your Home) | $250,000 ($500,000 for certain married persons filing a joint return) |
| Ownership and use tests for the exclusion (Sale or Exchange of Your Home) | 2 years |
What the publication covers
The introduction says “The purpose of this publication is to provide information on figuring and claiming the deduction for business use of your home.” It also says “The rules in this publication apply to individuals.” For rental use of a property, it points readers to Publication 527 instead.
Chapters and parts in plain words
The publication starts with Qualifying for a Deduction, which covers exclusive use, regular use, trade or business use, the principal place of business test, meeting patients, clients or customers at home, and separate structures. Figuring the Deduction follows, with two routes: actual expenses (insurance, rent, repairs, utilities, depreciation of the home, the business percentage and the deduction limit) or the simplified method.
Later parts cover the daycare facility rules, selling or exchanging a home that was partly used for business, furniture and equipment used in the business (including listed property and the section 179 deduction), recordkeeping, and Where To Deduct for self-employed people and partners.
Tests a space must pass
The IRS publication says “To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business.” “To qualify under the regular use test, you must use a specific area of your home for business on a regular basis.” “Incidental or occasional business use is not regular use.”
For the principal place of business test, it says “Your home office will qualify as your principal place of business if you meet the following requirements.” The two requirements listed are exclusive and regular use for administrative or management activities, and no other fixed location where you conduct substantial administrative or management activities of the business.
Worksheets, tables and charts inside
The publication includes Figure A, which asks whether the business use of your home is deductible. It also carries the “Worksheet To Figure the Deduction for Business Use of Your Home”, the “Area Adjustment Worksheet (for simplified method)”, and the “Daycare Facility Worksheet (for simplified method)”. A depreciation table is included as well.
It says “If you used your home for business and you are filing Schedule C (Form 1040), you will use either Form 8829 or the Simplified Method Worksheet in your Instructions for Schedule C.” On this site, see the Form 8829 guide, the simplified method worksheet page, and the home office deduction explainer.
The figures that matter
On the simplified method, the IRS publication says “In most cases, you will figure your deduction by multiplying $5, the prescribed rate, by the area of your home used for a qualified business use.” “The area you use to figure your deduction is limited to 300 square feet.”
On depreciation, it says “Under MACRS, nonresidential real property is depreciated using the straight line method over 39 years.”
On the deduction limit, it says “If your gross income from the business use of your home equals or exceeds your total business expenses (including depreciation), you can deduct all your business expenses related to the use of your home.”
On selling the home, it says that “you may be able to exclude up to $250,000 ($500,000 for certain married persons filing a joint return) of the gain on the sale or exchange.” One of the tests is “You owned the home for at least 2 years (ownership test), and” the other is a matching 2 year use test.
Where to go next
For the line on Schedule C where the deduction is reported, see Schedule C line 30. For depreciation of equipment used in the business, see Form 4562. For what a home sale can trigger, see home sale taxes.
Where this comes from
The IRS page About Publication 587 opens with “This publication explains how to figure and claim the deduction for business use of your home.” It links the PDF and eBook editions and the earlier revisions of the publication.
This page describes the web edition of Publication 587 (2025), Business Use of Your Home, as served on irs.gov on October 19, 2026. The IRS can revise a publication after we read it, and the IRS page controls. General information, not tax or legal advice.
Common mistakes
- Using a room for both business and family life. The IRS publication says “You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes.”
- Treating occasional work as regular use. The publication says “Incidental or occasional business use is not regular use.”
- Assuming any profit-seeking activity counts. The publication says “If you use your home for a profit-seeking activity that is not a trade or business, you cannot take a deduction for its business use.”
- Assuming an employee can claim it. In Figure A, the answer to “Are you using the part of your home as an employee?” being yes leads to no deduction.
Related: IRS publications by number, Home office deduction, Form 8829, Simplified method worksheet, Schedule C line 30, Form 4562, and Home sale taxes.
Sources
- IRS, Publication 587 (2025), Business Use of Your Home (irs.gov): https://www.irs.gov/publications/p587
- IRS, About Publication 587 (irs.gov): https://www.irs.gov/forms-pubs/about-publication-587
Read from the IRS pages linked above on October 19, 2026. General information, not tax or legal advice. The IRS publication and the instructions for your own form control, and your own facts decide the outcome.