Instructions For Form 8829 - Expenses For Business Use Of Your Home

property taxes are deductible under the normal rules. No

income (Schedule C, line 7, and gains from Form 8949,

deduction is allowed for other expenses allocable to the

Schedule D, and Form 4797) from the business use of your

tax-exempt allowance.

home. In making this determination, consider the amount of time

you spend at each location as well as other facts. After

determining the part of your gross income from the business use

Specific Instructions

of your home, subtract from that amount the total expenses

shown on Schedule C, line 28, plus any losses shown on Form

Part I

8949 (and included in Schedule D) or Form 4797 that are

allocable to the trade or business in which you use your home

Lines 1 and 2

but that are not allocable to the use of the home. Enter the result

on Form 8829, line 8.

To determine the area on lines 1 and 2, you can use square feet

or any other reasonable method if it accurately figures your

Columns (a) and (b)

business percentage on line 7.

Enter as direct or indirect expenses only expenses for the

Do not include on line 1 the area of your home you used to

business use of your home (that is, expenses allowable only

figure any expenses allocable to inventory costs. The business

because your home is used for business). If you did not operate

percentage of these expenses should have been taken into

a business for the entire year, you can deduct only the expenses

account in Schedule C, Part III.

paid or incurred for the portion of the year you used your home

for business. Other expenses not allocable to the business use

Special Computation for Certain Daycare Facilities

of your home, such as salaries, supplies, and business

If the part of your home used as a daycare facility includes areas

telephone expenses, are deductible elsewhere on Schedule C

used exclusively for business as well as other areas used only

and should not be entered on Form 8829.

partly for business, you cannot figure your business percentage

Direct expenses benefit only the business part of your home.

using Part I. Instead, follow these three steps:

They include painting or repairs made to the specific area or

1. Figure the business percentage of the part of your home

rooms used for business. Enter 100% of your direct expenses on

used exclusively for business by dividing the area used

the appropriate line in column (a).

exclusively for business by the total area of the home.

Indirect expenses are for keeping up and running your entire

2. Figure the business percentage of the part of your home

home. They benefit both the business and personal parts of your

used only partly for business by following the same method used

home. Generally, enter 100% of your indirect expenses on the

in Part I of the form, but enter on line 1 of your computation only

appropriate line in column (b).

the area of the home used partly for business.

Exception. If the business percentage of an indirect expense

3. Add the business percentages you figured in the first two

is different from the percentage on line 7, enter only the business

steps and enter the result on line 7. Attach your computation and

part of the expense on the appropriate line in column (a), and

enter “See attached computation” directly above the percentage

leave that line in column (b) blank. For example, your electric bill

you entered on line 7.

is $800 for lighting, cooking, laundry, and television. If you

reasonably estimate $300 of your electric bill is for lighting and

Line 4

you use 10% of your home for business, enter $30 on line 20 in

Enter the total number of hours the facility was used for daycare

column (a). Do not make an entry on line 20 in column (b) for any

during the year.

part of your electric bill.

Example. Your home is used Monday through Friday for 12

Lines 9, 10, and 11

hours per day for 250 days during the year. It is also used on 50

Enter only the amounts that would be deductible whether or not

Saturdays for 8 hours per day. Enter 3,400 hours on line 4

you used your home for business (that is, amounts allowable as

(3,000 hours for weekdays plus 400 hours for Saturdays).

itemized deductions on Schedule A (Form 1040)).

Line 5

Treat casualty losses as personal expenses for this step.

If you started or stopped using your home for daycare in 2012,

Figure the amount to enter on line 9 by completing Form 4684,

you must prorate the number of hours based on the number of

Section A.

days the home was available for daycare. Cross out the

If you are filing Schedule A, enter 10% of your adjusted gross

preprinted entry on line 5. Multiply 24 hours by the number of

income excluding the gross income from business use of your

days available and enter the result.

home and the deductions attributable to that income when

Part II

figuring the amount to enter on Form 4684, line 17. Include on

Form 8829, line 9, the amount from Form 4684, line 18. See the

Line 8

instructions for line 28, later, to deduct part of the casualty losses

not allowed because of the limits on Form 4684. Do not file or

If all the gross income from your trade or business is from the

use that Form 4684 to figure the amount of casualty losses to

business use of your home, enter on line 8 the amount from

deduct on Schedule A. Instead, complete a separate Form 4684

Schedule(s) C, line 29, plus any gain derived from the business

to deduct the personal portion of your casualty losses.

use of your home and shown on Form 8949 (and included on

Schedule D (Form 1040)) or Form 4797, minus any loss shown

On line 10, include only the total of your mortgage interest

on Form 8949 (and included in Schedule D) or Form 4797 that

and qualified mortgage insurance premiums that would be

are allocable to the trade or business in which you use your

deductible on Schedule A and that qualifies as a direct or

home but are not allocable to the use of the home. If you file

indirect expense. Do not include mortgage interest on a loan that

more than one Form 8829, include only the income earned and

did not benefit your home (for example, a home equity loan used

to pay off credit card bills, to buy a car, or to pay tuition costs).

the deductions attributable to that income during the period you

owned the home for which Part I was completed.

Treat qualified mortgage insurance premiums as personal

If some of the income is from a place of business other than

expenses for this step. Figure the amount to enter on line 10 by

your home, you must first determine the part of your gross

completing Schedule A, line 13, in accordance with the

Instructions For Form 8829 - Expenses For Business Use Of Your Home - 2012 Page 2

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