Updated October 28, 2026. Quick answer: The Worksheet To Figure the Deduction for Business Use of Your Home in Publication 587 is for Schedule F filers and partners who deduct actual expenses. If you file Schedule C, use Form 8829 instead. It has four parts and 42 lines, and its deduction limit is your business gross income minus the other business expenses.
IRS worksheet walk-throughs: Pub 587 Line 7 Worksheet.
IRS worksheet walk-throughs: Pub 587 Area Adjustment Worksheet.
Who uses this worksheet
Publication 587 says “This worksheet is to be used by taxpayers filing Schedule F (Form 1040) or by partners with certain unreimbursed ordinary and necessary expenses if using actual expenses to figure the deduction.” The caution is explicit: “If you file Schedule C (Form 1040) or Schedule C (Form 1040) with Form 1040-SS and use actual expenses to figure your deduction, use Form 8829 instead of this worksheet.” Form 8829 is titled “Expenses for Business Use of Your Home” and is covered at Form 8829. For the simplified alternative see the home office Simplified Method Worksheet.
One worksheet per business use
The worksheet says “Use a separate worksheet for each qualified business use of your home.” It is a keep-for-your-records worksheet, and its result is carried to your return as the instructions direct.
Part 1: the part of your home used for business
| Line | What the worksheet says |
|---|---|
| 1 | “Area of home used for business” |
| 2 | “Total area of home” |
| 3 | “Percentage of home used for business (divide line 1 by line 2 and show result as percentage)” |
Part 2: your allowable deduction, lines 4 to 34
| Line | What the worksheet says |
|---|---|
| 4 | “Gross income from business (see instructions)” |
| 5 to 7 | “Casualty losses”, “Deductible mortgage interest” and “Real estate taxes”, each in a direct column (a) and an indirect column (b). |
| 8 | “Total of lines 5 through 7” |
| 9 | “Multiply line 8, column (b), by line 3” |
| 10 | “Add line 8, column (a), and line 9” |
| 11 | “Business expenses not from business use of home (see instructions)” |
| 12 | “Add lines 10 and 11” |
| 13 | “Deduction limit. Subtract line 12 from line 4” |
| 14 to 20 | Excess mortgage interest, excess real estate taxes, insurance, rent, repairs and maintenance, utilities and other expenses. |
| 21 | “Add lines 14 through 20” |
| 22 | “Multiply line 21, column (b), by line 3” |
| 23 | “Carryover of operating expenses from prior year (see instructions)” |
| 24 | “Add line 21, column (a), line 22, and line 23” |
| 25 | “Allowable operating expenses. Enter the smaller of line 13 or line 24” |
| 26 | “Limit on excess casualty losses and depreciation. Subtract line 25 from line 13” |
| 27 to 30 | Excess casualty losses, depreciation from line 40, and the prior-year carryover, added on line 30. |
| 31 | “Allowable excess casualty losses and depreciation. Enter the smaller of line 26 or line 30” |
| 32 | “Add lines 10, 25, and 31” |
| 33 | “Casualty losses included on lines 10 and 31 (see instructions)” |
| 34 | “Allowable expenses for business use of your home. (Subtract line 33 from line 32.)” |
Parts 3 and 4: depreciation and carryover, lines 35 to 42
| Line | What the worksheet says |
|---|---|
| 35 | “Smaller of adjusted basis or fair market value of home (see instructions)” |
| 36 | “Basis of land” |
| 37 | “Basis of building (subtract line 36 from line 35)” |
| 38 | “Business basis of building (multiply line 37 by line 3)” |
| 39 | “Depreciation percentage (from applicable table or method)” |
| 40 | “Depreciation allowable (multiply line 38 by line 39)” |
| 41 | “Operating expenses. Subtract line 25 from line 24. If less than zero, enter -0-” |
| 42 | “Excess casualty losses and depreciation. Subtract line 31 from line 30. If less than zero, enter -0-” |
An example with invented numbers
Illustration, not an IRS example. A farmer uses 200 square feet of a 2,000 square foot home for the farm office.
| Item | Illustration |
|---|---|
| Line 1: area used for business, square feet (invented) | 200 |
| Line 2: total area of home, square feet (invented) | 2,000 |
| Line 3, computed: line 1 / line 2 (10 percent) | 0.1 |
| Line 4: gross income from the business (invented) | $8,000 |
| Line 8, column (b): indirect mortgage interest and taxes (invented) | $4,000 |
| Line 9, computed: line 8 column (b) x line 3 | $400 (computed) |
| Line 11: business expenses not from use of the home (invented) | $2,000 |
| Line 12, computed: line 10 + line 11 (line 10 is $400 here) | $2,400 (computed) |
| Line 13, computed: line 4 minus line 12 | $5,600 (computed) |
| Line 21, column (b): indirect operating expenses (invented) | $5,000 |
| Line 22, computed: line 21 column (b) x line 3 | $500 (computed) |
| Line 25, computed: the smaller of line 13 and line 24 (line 24 is $500 here) | $500 (computed) |
The operating expenses allowed are the smaller of the deduction limit and the expenses claimed, which here is the $500 of expenses. Everything that cannot be used this year flows to the carryover lines 41 and 42.
Edition
This page reads Publication 587 (2025), the file irs.gov served on 2026-10-28 (sha256 in the kit data). It covers the 2025 return, filed in 2026. Check the tax year printed on the worksheet in your own copy and use that year’s line numbers and dollar amounts, because a different year’s worksheet can word its lines differently.
Common mistakes
- Using this worksheet for a Schedule C business that deducts actual expenses. Publication 587 sends that filer to Form 8829.
- Claiming mortgage interest in column (a) as a direct expense. Publication 587 says not to claim mortgage interest in column (a), even for a separate structure; if you itemize, the deductible amount goes in column (b) of line 6.
- Dropping the carryover. Lines 41 and 42 are how unallowed expenses move to next year.
Related: Form 8829, the home office deduction, Schedule C line 30, and the home office Simplified Method Worksheet.
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Answer againSources
- Publication 587 (2025), Business Use of Your Home: https://www.irs.gov/pub/irs-pdf/p587.pdf
- Form 8829 (2025), Expenses for Business Use of Your Home: https://www.irs.gov/pub/irs-pdf/f8829.pdf
Read from the IRS documents linked above on October 28, 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.