Form 8829: Expenses for Business Use of Your Home

You can deduct expenses for part of your home only if you use that part exclusively and on a regular basis as your principal place of business, as a place where your patients, clients or customers meet with you in the normal course of your business, or as a separate structure not attached to your home. Two exceptions to the exclusive use rule cover space used regularly to store inventory or product samples and certain daycare facilities.

Your home office counts as your principal place of business if you use it exclusively and regularly for administrative or management work and you have no other fixed location where you do substantial work of that kind. Billing customers, keeping books and records, ordering supplies, setting up appointments and writing reports all count as administrative or management activities. Having someone else do your billing elsewhere does not disqualify your home office.

• Do not use this form if you are a partner claiming actual expenses or you claim these expenses on Schedule F (Form 1040).
• Do not use it for home expenses you have as an employee. You cannot deduct those on your personal return.
• Do not use it if all the expenses belong to inventory costs. Those go in Schedule C, Part III.
• Do not use it for a home where you elected the simplified method for 2025.

The 2025 form covers your 2025 tax year, and you file it only with Schedule C (Form 1040). The IRS text gives no separate due date for it, because it travels with your return. Part IV figures the operating expenses and the excess casualty losses and depreciation you carry over to 2026 when your expenses run past this year's limit. That carryover faces the deduction limit for 2026, whether or not you live in the same home that year.

Part I turns your business space into a percentage. You enter the area used for business on line 1 and the total area of your home on line 2, using square feet or any other reasonable method that gets the percentage right. Part II applies that percentage to your costs and caps the result against the income figure on line 8. Part III figures depreciation of your home. Part IV carries forward whatever the limit blocked.

Column (a) is for direct expenses, which benefit only the business part of your home, such as painting or repairs in the rooms you use for business. Enter 100% of those. Column (b) is for indirect expenses, which keep your whole home running. Enter 100% of those too. If the business share of an indirect expense differs from your line 7 percentage, put only the business part in column (a) and leave column (b) blank.

• Costs not tied to the business use of your home, such as salaries, supplies and advertising, belong elsewhere on Schedule C.
• If you did not run the business all year, count only expenses paid or incurred for the part of the year you used your home for business.
• The result on line 36 goes on Schedule C, line 30.

The overall limit on the deduction for state and local income, sales and property taxes rose to $40,000, or $20,000 if you file married filing separately. That limit shrinks if your modified adjusted gross income is more than $500,000, or $250,000 if married filing separately, but it will not drop below $10,000, or $5,000 if married filing separately. The limit feeds the Line 11 Worksheet, which decides how much of your real estate taxes belong on line 11 and how much moves to line 17.

If you used the simplified method for 2024 but are not using it for 2025, you may still have unallowed expenses from an earlier Form 8829 to bring forward. Line 25 takes prior year operating expenses and line 31 takes prior year excess casualty losses and depreciation. On line 41, if you first used your home for business in 2024 and used the simplified method that year, enter 2.564%.

If you provide daycare in your home, you can deduct expenses even when the same space serves personal purposes, as long as you have applied for and not been rejected for a license, certification, registration or approval under state law, still hold one, or are exempt. Lines 4 through 6 handle the time share. Line 4 takes the total hours the facility was used for daycare during the year. Line 5 takes 8,760 unless you started or stopped during the year.

Storage space works differently. You can deduct expenses for space used regularly to store inventory or product samples from a business of selling products at retail or wholesale, and your home must be the only fixed location of that business. If you rent your home rather than own it, put the rent you paid on line 19, column (b). If your housing comes free of charge and its value is tax exempt, you cannot deduct any rental value.