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

(and still have in effect), or be exempt from having a license,

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

certification, registration, or approval as a daycare center or as a

but is not allocable to the use of the home. If you file more than

family or group daycare home under state law.

one Form 8829, include only the income earned and the

deductions attributable to that income during the period you

Expenses Related to TaxExempt Income

owned the home for which Part I was completed.

Generally, you cannot deduct expenses that are allocable to

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

tax-exempt income. However, if you receive a tax-exempt

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

parsonage allowance or a tax-exempt military housing

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

allowance, your expenses for mortgage interest and real

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

property taxes are deductible under the normal rules. No

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

deduction is allowed for other expenses allocable to the

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

tax-exempt allowance.

determining the part of your gross income from the business use

of your home, subtract from that amount the total expenses

Specific Instructions

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

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

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

Part I

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

on Form 8829, line 8.

Lines 1 and 2

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

Columns (a) and (b)

or any other reasonable method if it accurately figures your

Enter as direct or indirect expenses only expenses for the

business percentage on line 7.

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

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

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

figure any expenses allocable to inventory costs. The business

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

percentage of these expenses should have been taken into

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

account in Schedule C, Part III.

for business. Other expenses not allocable to the business use

of your home, such as salaries, supplies, and advertising, are

Special Computation for Certain Daycare Facilities

deductible elsewhere on Schedule C and should not be entered

on Form 8829.

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

used exclusively for business as well as other areas used only

Direct expenses benefit only the business part of your home.

partly for business, you cannot figure your business percentage

They include painting or repairs made to the specific area or

using Part I. Instead, follow these three steps:

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

the appropriate line in column (a).

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

used exclusively for business by dividing the area used

Indirect expenses are for keeping up and running your entire

exclusively for business by the total area of the home.

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

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

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

used only partly for business by following the same method used

appropriate line in column (b).

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

Exception. If the business percentage of an indirect expense

the area of the home used partly for business.

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

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

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

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

steps and enter the result on line 7. Attach a statement with your

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

computation and enter “See attached computation” directly

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

above the percentage you entered on line 7.

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

Line 4

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

part of your electric bill.

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

during the year.

Lines 9, 10, and 11

Example. Your home is used Monday through Friday for 12

Enter only the amounts that would be deductible whether or not

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

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

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

itemized deductions on Schedule A (Form 1040)).

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

Treat casualty losses as personal expenses for this step.

Line 5

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

Section A. If you are filing Schedule A, enter 10% of your

If you started or stopped using your home for daycare in 2015,

adjusted gross income excluding the gross income from

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

business use of your home and the deductions attributable to

days the home was available for daycare. Cross out the

that income when figuring the amount to enter on Form 4684,

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

line 17. Include on Form 8829, line 9, the amount from Form

days available and enter the result.

4684, line 18. See the instructions for line 28, later, to deduct

Part II

part of the casualty losses not allowed because of the limits on

Form 4684. Do not file or use this Form 4684 to figure the

amount of casualty losses to deduct on Schedule A. Instead,

Line 8

complete a separate Form 4684 to deduct the personal portion

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

of your casualty losses.

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

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

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

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

and qualified mortgage insurance premiums that would be

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

deductible on Schedule A and that qualifies as a direct or

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

indirect expense. Mortgage interest on a separate structure you

Instructions For Form 8829 - Expenses For Business Use Of Your Home - 2015 Page 2

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