Updated November 5, 2026. Quick answer: The Line 11 Worksheet in the Form 8829 instructions is for people who itemize and whose state and local taxes add up to more than $10,000 ($5,000 if married filing separately). It finds how much of the real estate tax on the business home fits under the state and local tax limit; line 10 goes to Form 8829 line 11 and line 11 of the worksheet goes to line 17 as excess real estate taxes.
When you use the worksheet
“If you are claiming the standard deduction, do not report an amount on line 11.” For itemizers the instructions give two steps. “If the total of your state and local income (or if elected on your Schedule A, general sales) taxes, real estate taxes, and personal property taxes is not more than $10,000 ($5,000 if married filing separately), enter all the real estate taxes attributable to the home in which you conducted business in column (b) of line 11.” Otherwise: “If you do not meet the condition of Step 1, use the following worksheet to figure the amount to include in column (a) of line 11.” The rest of Part II is covered on the lines 8 to 15 page.
The eleven lines
| Line | What it asks |
|---|---|
| 1 | “Enter your state and local income taxes (or, if you elect on Schedule A, your state and local general sales taxes) that are personal expenses” |
| 2 | “Enter all the state and local real estate taxes you paid on the home in which you conducted business” |
| 3 | Other state and local real estate taxes “you paid that are a personal expense and not included on line 2” |
| 4 | “Enter your state and local personal property taxes that are a personal expense” |
| 5 | “Add lines 1 through 4” |
| 6 | “Multiply line 2 by the percentage on Form 8829, line 7” |
| 7a | “Subtract line 6 from line 5” |
| 8 | “Enter the overall limit on the deduction for state and local income, sales, and property taxes from line 7b, 7c, 7d, or Step 6 of the Iteration Instructions (as applicable)” |
| 9 | “Subtract line 7a from line 8. If zero or less, enter -0-” |
| 10 | “Real estate taxes reported on line 11. Enter the smaller of line 6 or line 9 here and in column (a) of Form 8829, line 11” |
| 11 | “Excess real estate taxes reported on line 17. Subtract line 10 from line 6” |
The three limit tests on lines 7b, 7c and 7d
| Line | Test and result |
|---|---|
| 7b | “Is line 5 less than or equal to $10,000 ($5,000 if married filing separately)?” Yes: “Skip lines 7c and 7d. Enter $10,000 ($5,000 if married filing separately) on line 8. Then proceed to line 9.” |
| 7c | “Is line 7a greater than or equal to $40,000 ($20,000 if married filing separately)?” Yes: “Skip line 7d. Enter $10,000 ($5,000 if married filing separately) on line 8. Then proceed to line 9.” |
| 7d | “Would your modified adjusted gross income on line 4 of the State and Local Tax Deduction Worksheet in the Instructions for Schedule A (Form 1040) be less than or equal to $500,000 ($250,000 if married filing separately) if you entered $40,000 ($20,000 if married filing separately) on line 8 of this worksheet, next?” Yes: “Enter $40,000 ($20,000 if married filing separately) on line 8. Then proceed to line 9.” No or Unsure: “See Iteration Instructions, later.” |
The limit itself lives on the Schedule A side; see the Schedule A lines 5d and 5e page and SALT cap 2026.
The iteration instructions
A “No or Unsure” on line 7d starts a loop. “Step 1. Enter $10,000 ($5,000 if married filing separately) on line 8 of the Line 11 Worksheet.” “Complete lines 9, 10, and 11 of the Line 11 Worksheet.” Step 3 recomputes net profit and the adjustments that depend on it, and Step 4 puts the new adjusted gross income into the Schedule A worksheet. The loop stops when the modified adjusted gross income settles: “Is the difference between the current calculation of modified adjusted gross income and the most recent prior calculation of modified adjusted gross income more than $1?” If so, “Use the modified adjusted gross income determined in Step 4 to compute the overall limit on the deduction for state and local income, sales, and property taxes on line 9 of the State and Local Tax Deduction Worksheet in the Instructions for Schedule A (Form 1040).” Step 6 carries it back: “Enter the overall limit on the deduction for state and local income, sales, and property taxes determined in Step 5 on line 8 of the Form 8829 Line 11 Worksheet. Repeat Steps 2 through 4.”
Where the results go
Line 10 is the amount for column (a) of Form 8829 line 11. Line 11 of the worksheet feeds line 17: “If you used the Line 11 Worksheet to figure the amount to include in column (a) of line 11, then include the amount from line 11 of the Line 11 Worksheet in column (a) of line 17; otherwise, do not enter an amount on line 17.” On Schedule A: “do not include the business portion of your state and local real estate taxes (including line 6 of the Line 11 Worksheet) on line 5b of Schedule A.” The deduction for the excess is explained at the line 17 instructions: “Excess real estate taxes. See the instructions for Line 17, later, to deduct the part of your real estate taxes for the home in which you conducted business that is not allowed on line 11 because of the limitation on deducting state and local taxes as a personal expense.” The business percentage comes from Part I; see Form 8829 and the home office deduction.
Two worked examples (invented numbers)
Example 1 (computed): the limit does not bite. The taxes add to $13,500, the business share is $800, and the assumed answer on line 7d lets $40,000 go on line 8.
| Line | Entry | Value |
|---|---|---|
| 1 | State and local income taxes (invented) | $6,000 |
| 2 | Real estate taxes on the home with the business (invented) | $4,000 |
| 3 | Other personal real estate taxes (invented) | $3,000 |
| 4 | Personal property taxes (invented) | $500 |
| 5 | Lines 1 through 4 added (computed) | $13,500 |
| 6 | Line 2 times the 20% on Form 8829 line 7 (invented percentage; computed) | $800 |
| 7a | Line 5 minus line 6 (computed) | $12,700 |
| 7b | Is line 5 at or under $10,000? No (computed) | |
| 7c | Is line 7a $40,000 or more? No (computed) | |
| 7d | Assumed answer: Yes, the Schedule A modified adjusted gross income stays at or under $500,000 (invented) | |
| 8 | Overall limit from line 7d (computed) | $40,000 |
| 9 | Line 8 minus line 7a (computed) | $27,300 |
| 10 | Smaller of line 6 or line 9, to Form 8829 line 11 column (a) (computed) | $800 |
| 11 | Line 6 minus line 10 (computed) | -0- |
All $800 of the business share fits, and the excess on line 11 is -0- (computed).
Example 2 (computed): the limit bites. Here the taxes add to $15,000, more than $10,000, and the line 7d answer is No or Unsure, so the first pass uses the iteration Step 1 figure.
| Line | Entry | Value |
|---|---|---|
| 1 | State and local income taxes (invented) | $8,000 |
| 2 | Real estate taxes on the home with the business (invented) | $5,000 |
| 3 | Other personal real estate taxes (invented) | -0- |
| 4 | Personal property taxes (invented) | $2,000 |
| 5 | Lines 1 through 4 added (computed) | $15,000 |
| 6 | Line 2 times the 40% on Form 8829 line 7 (invented percentage; computed) | $2,000 |
| 7a | Line 5 minus line 6 (computed) | $13,000 |
| 7b | Is line 5 at or under $10,000? No (computed) | |
| 7c | Is line 7a $40,000 or more? No (computed) | |
| 7d | Assumed answer: No or Unsure, so Step 1 of the iteration instructions puts $10,000 on line 8 (invented) | |
| 8 | Overall limit after Step 1 (computed) | $10,000 |
| 9 | Line 8 minus line 7a, below zero so -0- (computed) | -0- |
| 10 | Smaller of line 6 or line 9 (computed) | -0- |
| 11 | Line 6 minus line 10 (computed) | $2,000 |
On this first pass none of the business share is allowed on line 10 and all $2,000 is excess real estate taxes on line 11 (computed). Steps 3 through 6 would then figure the adjusted gross income and a new line 8, and Steps 2 through 4 would repeat, so the loop’s final line 8 can differ.
Edition
This page reads the Instructions for Form 8829 (2025), the file irs.gov served on 2026-11-05 (archived copy below). The worksheet is on page 4 of that edition. The dollar limits on lines 7b to 7d are printed in this edition; check the year on your own copy before applying them.
Common mistakes
- Completing the worksheet when you take the standard deduction. The instructions say to report nothing on line 11 in that case.
- Putting the business share of real estate tax on Schedule A line 5b as well as on Form 8829.
- Stopping after the first pass when line 7d was No or Unsure. The iteration instructions repeat until modified adjusted gross income settles.
- Forgetting line 11 of the worksheet. It is the amount that carries to line 17 as excess real estate taxes.
Related: Form 8829, Form 8829 lines 8 to 15, and Schedule C line 30.
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Answer againSources
- Instructions for Form 8829 (2025), Expenses for Business Use of Your Home: IRS archived PDF (irs.gov)
- IRS, About Form 8829, Expenses for Business Use of Your Home: https://www.irs.gov/forms-pubs/about-form-8829
Read from the IRS documents linked above on November 5, 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.