Updated October 16, 2026. Quick answer: Form 8829 figures the allowable expenses for business use of your home on Schedule C line 30, plus any carryover to 2026. The instructions allow the deduction only for a part of the home used exclusively on a regular basis for a qualifying purpose, and they bar the form for employees. The simplified method skips the form, uses $5 per square foot up to 300 square feet, and is reported directly on Schedule C.
Picking the Schedule C business code for your work (2025 chart): Schedule C code for real estate agents and Schedule C code for child care.
Related reading on this site: IRS Publication 587.
Business use of your home (Form 8829), the saver’s credit (Form 8880), clean vehicle credits (Form 8936) and amended returns (Form 1040-X), read line by line: Form 8829 lines 1 to 7, Form 8829 lines 16 to 27 and Form 8829 lines 37 to 44.
Schedule C and Schedule SE (Form 1040) for 2025, read line by line: Schedule C lines 16a and 16b, Schedule C line 30 and Schedule C Part IV.
Read box by box from the IRS instructions: Form 1098 box 1, Form 1098 box 2 and Form 1098 box 6.
What Form 8829 does and who cannot use it
The instructions state the job: “Use Form 8829 to figure the allowable expenses for business use of your home on Schedule C (Form 1040) and any carryover to 2026 of amounts not deductible in 2025.” “Use a separate Form 8829 for each home you used for the business during the year.” The form’s header limits where it goes: “File only with Schedule C (Form 1040).” The Schedule C side of the process is on the Schedule C page.
A warning comes right away: “You must meet specific requirements to deduct expenses for the business use of your home.” “Even if you meet these requirements, your deductible expenses may be limited.”
Four situations are excluded from the form. The first: “You are claiming actual expenses for business use of your home as a partner or you are claiming these expenses on Schedule F (Form 1040).” “Instead, complete the Worksheet To Figure the Deduction for Business Use of Your Home in Pub. 587.” The second is employees: “You have expenses for business use of your home as an employee. You can’t deduct these expenses on your personal return.” The third is when all of the expenses for business use of your home are properly allocable to inventory costs, which are figured in Schedule C, Part III, and the fourth is the simplified method: “You have elected to use the simplified method for your home for 2025.” “If you had more than one home during the year that you used for business, you can use the simplified method for only one home.”
Regular and exclusive use, and what qualifies
The core test is in one sentence: “Generally, you can deduct business expenses that apply to a part of your home only if that part is exclusively used on a regular basis” and then the instructions list three purposes: “As your principal place of business for any of your trades or businesses”, “As a place of business used by your patients, clients, or customers to meet or deal with you in the normal course of your trade or business”, or “In connection with your trade or business if it is a separate structure that is not attached to your home.”
For the principal place of business test, the instructions say a home office qualifies if “You use it exclusively and regularly for administrative or management activities of your trade or business.” and “You have no other fixed location where you conduct substantial administrative or management activities of your trade or business.”
Two exceptions to exclusivity exist. For inventory storage: “Your home must be the only fixed location of your trade or business.” For daycare, the instructions allow a mixed use space if the state licensing conditions they list are met.
The simplified method as printed in the Schedule C instructions
The simplified method is explained in the Schedule C instructions, which this form refers to. They describe it as “an alternative to the calculation, allocation, and substantiation of actual expenses.” “In most cases, you’ll figure your deduction by multiplying the area (measured in square feet) used regularly and exclusively for business, regularly for daycare, or regularly for storage of inventory or product samples, by $5.” “The area you use to figure your deduction cannot exceed 300 square feet.”
Computed here, not an IRS example: 200 square feet times $5 is $1,000, and the printed 300 square foot cap times $5 is $1,500. The Simplified Method Worksheet then enters the smaller of the gross income limitation or that square footage amount on Schedule C, line 30, so $1,500 is a ceiling.
The choice is made each year, and the instructions say “An election for a year, once made, is irrevocable.”
Part I to Part IV, line by line
The form has four parts. Part I figures the business percentage, Part II figures the allowable deduction, Part III figures depreciation and Part IV figures the carryover. The key lines are quoted below.
| Line | As printed on the form |
|---|---|
| Part I, line 3 | “Divide line 1 by line 2. Enter the result as a percentage” |
| Part II, line 8 | “Enter the amount from Schedule C, line 29, plus any gain derived from the business use of your home, minus any loss from the trade or business not derived from the business use of your home.” |
| Part II, line 27 | “Allowable operating expenses. Enter the smaller of line 15 or line 26” |
| Part II, line 36 | “Allowable expenses for business use of your home. Subtract line 35 from line 34. Enter here and on Schedule C, line 30.” |
| Part III, line 40 | “Business basis of building. Multiply line 39 by line 7” |
| Part III, line 42 | “Depreciation allowable (see instructions). Multiply line 40 by line 41.” |
| Part IV, line 43 | “Operating expenses. Subtract line 27 from line 26.” |
Part II separates two kinds of cost. “Direct expenses benefit only the business part of your home.” “Indirect expenses are for keeping up and running your entire home.” “They benefit both the business and personal parts of your home.” Costs that belong on the schedule itself stay off the form: “Other expenses not allocable to the business use of your home, such as salaries, supplies, and advertising, are deductible elsewhere on Schedule C and should not be entered on Form 8829.”
Renters and standard deduction filers have specific entries. “If you rent rather than own your home, include the rent you paid on line 19, column (b).” “If you claim the standard deduction, you will not include any mortgage interest or real estate taxes on lines 10 and 11; instead, you will claim the entire business use of the home portion of those expenses using lines 16 and 17.”
The following is an illustration with made-up amounts, not an IRS example, for a renter. It shows how the line 15 limit controls line 27 and creates a carryover:
| Step | Case A | Case B | Note |
|---|---|---|---|
| Area used for business (line 1), made-up | 200 sq ft | 200 sq ft | Illustration input |
| Total area of home (line 2), made-up | 2,000 sq ft | 2,000 sq ft | Illustration input |
| Business percentage (lines 3 and 7) | 10% | 10% | Computed here: 200 divided by 2,000 |
| Limit from Schedule C (line 8) | $12,000 | $1,500 | Illustration input |
| Column (b) expenses (line 23), a renter’s rent, insurance and utilities | $18,000 | $18,000 | Illustration input |
| Business part of that (line 24) | $1,800 | $1,800 | Computed here: $18,000 times 10% |
| Allowable operating expenses (line 27) | $1,800 | $1,500 | Smaller of line 15 and line 26 |
| Carryover to 2026 (line 43) | $0 | $300 | Computed here: line 26 minus line 27 |
Depreciation, the limits and the carryover
Part III figures depreciation on the business part of the home. The basis starts like this: “Enter on line 37 the cost or other basis of your home (including land), or, if less, the fair market value of your home on the date you first used the home for business.” “Do not adjust this amount for depreciation claimed or changes in fair market value after the year you first used your home for business.”
Line 41 uses a percentage that depends on when business use started. For a home first used for business in 2025, the instructions list the following by month, as printed:
| First used for business in 2025 | Line 41 percentage as printed |
|---|---|
| January | 2.461% |
| February | 2.247% |
| March | 2.033% |
| April | 1.819% |
| May | 1.605% |
| June | 1.391% |
| July | 1.177% |
| August | 0.963% |
| September | 0.749% |
| October | 0.535% |
| November | 0.321% |
| December | 0.107% |
For a home first used earlier, the instructions say “after May 12, 1993, and before 2025 (except as noted below), 2.564%.”
Where the depreciation goes needs care. The instructions say “Do not include the amount from Form 8829, line 42, on Schedule C, line 13.” Form 4562 is needed only in two cases, as the instructions describe them: “You first used your home for business in 2025” or “You are depreciating additions and improvements placed in service in 2025.”
Amounts that are not allowed in the year carry forward. The instructions say “If your expenses are greater than the current year’s limit, you can carry over the excess to 2026.” “The carryover will be subject to the deduction limit for that year, whether or not you live in the same home during that year.” “Figure the amount of operating expenses you can carry over to 2026 by subtracting line 27 from line 26.”
A gap worth knowing about: neither the form nor its instructions use the word recapture, and the words sell and sold do not appear in them either. The line 41 table does have a row for a home you stopped using for business before the end of the year, which points to the percentage in Pub. 946 as adjusted by its Sale or Other Disposition Before the Recovery Period Ends instructions. On requirements and limits, the instructions say “For details, see Pub. 587.” The broader home office discussion is on the home office deduction page. The edition read for this page is Form 8829 for 2025 and the 2025 Instructions for Form 8829, which are the revisions irs.gov served when they were read on 2026-10-16. A later year can change the depreciation percentages, the line numbers and the carryover year, so check the revision printed on the form you are filing.
Every Form 8829 line and part page in one table
Each row links to the page that reads a line, group of lines or part of Form 8829. The right column is the summary each page carries.
| Page | What it covers |
|---|---|
| Form 8829 Lines 1 to 7: Business Part of Home (2025 Return) | How Form 8829 lines 1 to 7 work on the 2025 return: the business area, total area, the daycare hours lines, and the business percentage on line 7. |
| Form 8829 Lines 8 to 15: Income Limit, Mortgage, Taxes | How Form 8829 lines 8 to 15 work on the 2025 return: the income limit on line 8, direct and indirect columns, casualty, mortgage interest and real estate taxes. |
| Form 8829 Lines 16 to 27: Operating Expenses (2025 Return) | How Form 8829 lines 16 to 27 work on the 2025 return: excess mortgage interest and taxes, insurance, rent, utilities, carryover and operating expenses. |
| Form 8829 Lines 28 to 36: Allowable Expenses (2025 Return) | How Form 8829 lines 28 to 36 work on the 2025 return: the casualty and depreciation limit, carryover, Form 4684 and the allowable expenses on line 36. |
| Form 8829 Lines 37 to 44: Depreciation, Carryover (2025) | How Form 8829 lines 37 to 44 work on the 2025 return: the home’s basis, land, depreciation on lines 41 and 42, and the carryover to 2026 in Part IV. |
Common mistakes
- Using the form as an employee. The instructions say employee expenses for business use of the home cannot be deducted on a personal return, and the form is for Schedule C filers.
- Claiming part of a room that also serves personal use. The core test requires that the part be used exclusively on a regular basis, with printed exceptions only for inventory storage and daycare.
- Putting the line 42 depreciation on Schedule C line 13 as well. The instructions say not to include that amount there, because it already reaches Schedule C through line 36 of Form 8829.
Related: Schedule C instructions, the home office deduction, business deductions at consultant scale, and self-employment tax explained.
Sources
- Form 8829 (2025), Expenses for Business Use of Your Home: https://www.irs.gov/pub/irs-pdf/f8829.pdf
- 2025 Instructions for Form 8829: https://www.irs.gov/pub/irs-pdf/i8829.pdf
- 2025 Instructions for Schedule C (Form 1040): https://www.irs.gov/pub/irs-pdf/i1040sc.pdf
Read from the IRS documents linked above on October 16, 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.