Instructions For Schedule C 1040 - 2016 (Page 10 of 18) in pdf

Do not reduce your deduction for any

a timely-filed, original federal income

of actual expenses. The simplified meth-

portion of a credit that was passed

tax return for that year. An election for a

od is not an alternative to the exclusivity

through to you from a pass-through enti-

year, once made, is irrevocable. A

and other tests that must be met in order

ty.

change from using the simplified meth-

to qualify for this deduction. For more

od in one year to actual expenses in a

information about qualifying business

If you provided taxable fringe

succeeding year, or vice versa, is not a

uses, see Qualifying for a Deduction in

benefits to your employees,

change in method of accounting and

Pub. 587.

such as personal use of a car,

CAUTION

does not require the consent of the Com-

do not deduct as wages the amount ap-

Gross

income

limitation. The

missioner.

plicable to depreciation and other ex-

amount of your deduction is still limited

If you share your home with someone

penses claimed elsewhere.

to the gross income derived from quali-

else who uses the home for a separate

fied business use of the home reduced

business that qualifies for this deduction,

In most cases, you are required to file

by the business deductions that are not

each of you may make your own elec-

Form W-2, Wage and Tax Statement,

related to your use of the home. If this

tion, but not for the same portion of the

for each employee. See the General In-

limitation reduces the amount of your

home.

structions for Forms W-2 and W-3.

deduction, you cannot carryover the dif-

If you conduct more than one busi-

ference to another tax year.

Line 30

ness that qualifies for this deduction in

Carryover of actual expenses from

your home, your election to use the sim-

Form 8829. If you used Form 8829 in a

Business use of your home. You may

plified method applies to all your quali-

prior year, and you had actual expenses

be able to deduct certain expenses for

fied business uses of your home. You

that you could carryover to the next

business use of your home, subject to

are limited to a maximum of 300 square

year, you cannot claim those expenses if

limitations. To claim a deduction for

feet for all of the businesses you conduct

you are using the simplified method. In-

business use of your home, you can use

in your home that qualify for this deduc-

stead, the actual expenses from Form

Form 8829 or you can elect to determine

tion. Allocate the actual square footage

8829 that were not allowed will be car-

the amount of the deduction using a sim-

used (up to the maximum 300 square

ried over to the next year that you file

plified method.

feet) among your qualified business uses

Form 8829 for that business use of that

For additional information about

in any reasonable manner you choose,

home.

claiming this deduction, see Pub. 587.

but you may not allocate more square

feet to a qualified business use than you

Depreciation of home. You cannot

If you are not using the simpli-

actually use in that business.

deduct any depreciation (including any

fied method to determine the

TIP

additional first-year depreciation) or sec-

amount of expenses you may

If you used your home for more

tion 179 expense for the portion of your

deduct for business use of a home, do

than one business, you will

home that is used in a qualified business

not complete the additional entry spaces

need to file a separate Sched-

CAUTION

use if you figure the deduction for the

on line 30 for total square footage of

ule C for each business. Do not combine

business use of your home using the

your home and of the part of the home

your deductions for each business use

simplified method. The depreciation de-

used for business. Just include the

on a single Schedule C.

duction allowable for that portion of the

amount from line 35 of your Form 8829

home for that year is deemed to be zero.

Business use of more than one

on line 30.

home. You may have used more than

Although you cannot deduct

Simplified

method. The

simplified

one home in your business. If you used

any depreciation or section 179

TIP

method is an alternative to the calcula-

more than one home for the same busi-

expense for the portion of your

tion, allocation, and substantiation of ac-

ness during 2016, you may elect to use

home that is a qualified business use be-

tual expenses. In most cases, you will

the simplified method for only one

cause you elect to use the simplified

figure your deduction by multiplying the

home; you must file a Form 8829 to

method, you may still claim depreciation

area (measured in square feet) used reg-

claim a business use of the home deduc-

or the section 179 expense deduction on

ularly and exclusively for business, reg-

tion for any additional home. If one or

other assets (for example, furniture and

ularly for daycare, or regularly for stor-

more of the homes was not used for the

equipment) used in the qualified busi-

age of inventory or product samples, by

entire year (for example, you moved

ness use of your home.

$5. The area you use to figure your de-

during the year), see

Part-year use or

duction cannot exceed 300 square feet.

Figuring your allowable expenses for

area changes (for simplified method on-

You cannot use the simplified method to

business use of the home. You will

ly), later, and Columns (a) and (b) in the

figure a deduction for rental use of your

figure the deduction using Form 8829 or

Instructions for Form 8829.

home.

the simplified method worksheet, or

Other requirements must still be

both.

Electing to use the simplified meth

met. You must still meet all the use re-

You may not use the simplified

od. You choose whether or not to use

quirements to claim a deduction for

method and also file Form

the simplified method each tax year.

business use of the home. The simplified

8829 for the same qualified

Make the election by using the simpli-

method is only an alternative to the cal-

CAUTION

business use of the same home.

fied method to figure the deduction for

culation, allocation, and substantiation

the qualified business use of a home on

C-10

Instructions For Schedule C 1040 - 2016 Page 10

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