Updated November 4, 2026. Quick answer: The Area Adjustment Worksheet in Publication 587 (2025) finds the square footage you may enter on line 2 of the Simplified Method Worksheet when the home office was shared, used for more than one business, or used for only part of the year. The answer is never more than 300 square feet in total, and a month with fewer than 15 days of use counts as zero.
IRS worksheet walk-throughs: Pub 587 Line 7 Worksheet.
When you need it
The publication places the sheet next to the simplified method worksheets: “The Area Adjustment Worksheet (for simplified method) in this section may be used by any taxpayer using the simplified method to figure the deduction.” It is the sheet that feeds square footage into the Simplified Method Worksheet. Its opening rule is “If you used the same area for your qualified business use for the entire year, complete only Part I; otherwise, skip Part I and complete Part II using lines 1 through 5 to help you figure the amount to enter for each month.” “All amounts reported on this worksheet must be in square feet.”
Part I, lines 1 to 5
| Line | What it asks |
|---|---|
| 1 | “Area used for this qualified business use” |
| 2 | “Shared use. Complete line 2 if someone else also used the home to conduct business that qualifies for the deduction; otherwise, enter 300 on line 2d and go to line 3.” |
| 2a | “Area not shared. Enter portion of line 1 that was not shared with another person’s qualified business use of the home” |
| 2b | “Total area shared with another person’s qualified business use. Subtract line 2a from line 1” |
| 2c | “Reasonable allocation of shared area to this qualified business use” |
| 2d | “Add lines 2a and 2c” |
| 3 | “Multiple qualified business uses. Complete line 3 if you used the home for more than one qualified business use; otherwise, enter 300 on line 3d and go to line 4.” |
| 3a to 3d | “Total area of home used for all your qualified business uses” (3a); the maximum area of 300 (3b); “Enter the smaller of line 3a and 3b” (3c); “Reasonable allocation of line 3c to this qualified business use” (3d) |
| 4 | Maximum area, printed as 300 |
| 5 | “Enter the smaller of lines 1, 2d, 3d, and 4. Enter the result on line 2 of the Simplified Method Worksheet” |
The rules behind the lines
The instructions explain the shared-space line: “If you and another person both used the home to conduct business that qualifies for the deduction, the same area cannot be used by both persons to figure the deduction.” On several businesses they say “the total area that you can use to figure the deduction is still only 300 square feet, not 300 square feet per business use.” The split between uses is yours to make, within limits: “You may allocate the square footage among your qualified business uses in any reasonable manner, but you may not allocate more square feet to a qualified business use than was actually used.”
Part II, part-year or changed area
Part II is a monthly table from January to December (lines 6a to 6l). The note on it reads “If your qualified business use was less than 15 days in a month, enter -0- in column (ii) for that month; otherwise, use lines 1 through 5 above for each month, and enter the amount you get for line 5 in column (ii) for that month.” The totals are “Add lines 6a through 6l, column (ii)” (6m) and “Average monthly allowable square footage. Divide line 6m by 12. Enter the result on line 2 of the Simplified Method Worksheet” (6n).
Example with invented numbers (Part I)
Illustration, not an IRS example. A consultant uses 250 square feet of the home for one business. Of that, 100 square feet are also used by another person’s qualified business, and a reasonable split gives 40 of those 100 to the consultant. The consultant has two qualified businesses that use 400 square feet in all, and 220 are allocated to this one.
| Line | Entry | Square feet |
|---|---|---|
| 1 | Area used for this qualified business use (square feet, invented) | 250 |
| 2a | Area not shared (invented) | 150 |
| 2b | Total area shared with another person, line 1 minus line 2a (computed) | 100 |
| 2c | Reasonable allocation of the shared area to this use (invented) | 40 |
| 2d | Lines 2a and 2c added (computed) | 190 |
| 3a | Total area used for all your qualified business uses (invented) | 400 |
| 3b | Maximum area | 300 |
| 3c | Smaller of lines 3a and 3b (computed) | 300 |
| 3d | Reasonable allocation of line 3c to this use (invented) | 220 |
| 4 | Maximum area | 300 |
| 5 | Smaller of lines 1, 2d, 3d and 4 (computed): line 2 of the Simplified Method Worksheet | 190 |
Line 5 takes the smallest of 250, 190, 220 and 300, which is 190. That is the number that goes on line 2 of the Simplified Method Worksheet. Line 2d, the shared-space result, is what pulled it below the 250 square feet actually used.
Example with invented numbers (Part II)
Illustration, not an IRS example. Suppose the same arrangement started on June 20, so June has fewer than 15 days of use. Each full month from July uses the line 5 result of 190 square feet.
| Month or line | Square feet |
|---|---|
| January to May | 0 (no use) |
| June | 0 (use began June 20, fewer than 15 days) |
| July to December, each month | 190 |
| 6m: lines 6a to 6l added (computed) | 1,140 |
| 6n: line 6m divided by 12 (computed) | 95 |
Six months at 190 add to 1,140 on line 6m, and dividing by 12 gives 95 square feet for line 6n. That average, not 190, is what goes on line 2 of the Simplified Method Worksheet.
Where the square feet go
The result is multiplied by a rate on the Simplified Method Worksheet. The publication’s own steps start with “Multiply the allowable area by $5 (or less than $5 if the qualified business use is for a daycare that uses space in your home on a regular, but not exclusive, basis).” The worksheet’s line 5 then reads “Allowable expenses using the simplified method. Enter the smaller of line 1 or line 4.” Form 8829 is not used on this route: “You have elected to use the simplified method for your home for 2025.” is one of the situations in which its instructions say not to use that form.
| Square feet | Times $5 (computed) | Result before the line 1 gross income limit |
|---|---|---|
| 190 | $5 | $950 (computed) |
| 95 | $5 | $475 (computed) |
| 300 | $5 | $1,500 (computed) |
Illustration, not an IRS example. The 190 square feet from Part I give $950, the 95 square foot Part II average gives $475, and the 300 square foot cap gives the most the method can reach, $1,500. Whatever the area comes to, line 5 of the Simplified Method Worksheet cannot exceed line 1.
Edition
This page reads Publication 587 (2025), Business Use of Your Home (Including Use by Daycare Providers), the file irs.gov served on 2026-11-04 (sha256 in the kit data). Line numbers and letters belong to that edition, so check the label printed on the worksheet in your own copy before you follow a line reference.
Common mistakes
- Entering 300 square feet per business. The cap is 300 square feet in total across all qualified business uses.
- Counting a month with fewer than 15 days of use. The worksheet enters zero for that month.
- Using the full-month figure for a part-year office. Part II averages the twelve months, so line 6n is smaller.
- Claiming shared space twice. The same area cannot be used by both people to figure the deduction.
Related: Simplified Method Worksheet, Form 8829 lines 1 to 7, and home office deduction.
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Answer againSources
- Publication 587 (2025), Business Use of Your Home (Including Use by Daycare Providers): https://www.irs.gov/pub/irs-pdf/p587.pdf
- Instructions for Form 8829 (2025), Expenses for Business Use of Your Home: https://www.irs.gov/pub/irs-pdf/i8829.pdf
Read from the IRS documents linked above on November 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.