U.S. Individual Income Tax Return

2013

Instructions for Form 8829

Department of the Treasury
Internal Revenue Service

Expenses for Business Use of Your Home
Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments

For the latest information about developments related to Form
8829 and its instructions, such as legislation enacted after they
were published, go to www.irs.gov/form8829.

What's New

The IRS now provides a simplified method to determine your
expenses for business use of your home. For more information,
and to determine if you can use this simplified method, see
Schedule C (Form 1040), Part II, and its instructions.

General Instructions
Purpose of Form

Use Form 8829 to figure the allowable expenses for business
use of your home on Schedule C (Form 1040) and any carryover
to 2014 of amounts not deductible in 2013.
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. Part IV
is used to figure any allowable carryover of expenses that are
more than the limit. For details, see Pub. 587, Business Use of
Your Home (Including Use by Daycare Providers).
Who cannot use Form 8829. Do not use Form 8829 in the
following situations.
You are claiming expenses for business use of your home as
an employee or a partner, or you are claiming these expenses
on Schedule F (Form 1040). Instead, complete the worksheet in
Pub. 587.
All of the expenses for business use of your home are
properly allocable to inventory costs. Instead, figure these
expenses in Schedule C, Part III.
You have elected to use the simplified method for this home. If
you had more than one home during the year that you used for
business, you may only elect to use the simplified method for
one home; you will use Form 8829 to claim expenses for
business use of the other home. For more information about the
simplified method, see the Instructions for Schedule C and Pub.
587.

Who Can Deduct Expenses for
Business Use of a Home

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:
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.
As explained later, exceptions to this rule apply to space
used on a regular basis for:
Storage of inventory or product samples, and
Aug 05, 2013

Certain daycare facilities.

Principal Place of Business

In determining whether the office in your home qualifies as your
principal place of business, you must consider the following two
items.
The relative importance of the activities performed at each
place where you conduct business, and
The amount of time spent at each place where you conduct
business.
Your home office will qualify as your principal place of
business if you meet the following requirements.
You use it exclusively and regularly for administrative or
management activities of your trade or business.
You have no other fixed location where you conduct
substantial administrative or management activities of your trade
or business.
Administrative or management activities. There are many
activities that are administrative or managerial in nature. The
following are a few examples.
Billing customers, clients, or patients.
Keeping books and records.
Ordering supplies.
Setting up appointments.
Forwarding orders or writing reports.
Administrative or management activities performed at oth­
er locations. The following activities performed by you or
others will not disqualify your home office from being your
principal place of business.
You have others conduct your administrative or management
activities at locations other than your home. (For example,
another company does your billing from its place of business.)
You conduct administrative or management activities at
places that are not fixed locations of your business, such as in a
car or a hotel room.
You occasionally conduct minimal administrative or
management activities at a fixed location outside your home.
You conduct substantial nonadministrative or
nonmanagement business activities at a fixed location outside
your home. (For example, you meet with or provide services to
customers, clients, or patients at a fixed location of the business
outside your home.)
You have suitable space to conduct administrative or
management activities outside your home, but choose to use
your home office for those activities instead.
More information. For information on other ways to qualify to
deduct business use of the home expenses, see Pub. 587.

Storage of Inventory or Product Samples

You can also deduct expenses that apply to space within your
home used on a regular basis to store inventory or product
samples from your trade or business of selling products at retail
or wholesale. Your home must be the only fixed location of your
trade or business.

Daycare Facilities

If you use space in your home on a regular basis in the trade or
business of providing daycare, you may be able to deduct the

Cat. No. 15683B

Part II

business expenses even though you use the same space for
nonbusiness purposes. To qualify for this exception, you must
have applied for (and not have been rejected), been granted
(and still have in effect), or be exempt from having a license,
certification, registration, or approval as a daycare center or as a
family or group daycare home under state law.

Line 8

If all the gross income from your trade or business is from the
business use of your home, enter on line 8 the amount from
Schedule(s) C, line 29, plus any gain derived from the business
use of your home and shown on Form 8949 (and included on
Schedule D (Form 1040)) or Form 4797, minus any loss 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 but are not allocable to the use of the home. If you file
more than one Form 8829, include only the income earned and
the deductions attributable to that income during the period you
owned the home for which Part I was completed.

Expenses Related to Tax­Exempt Income

Generally, you cannot deduct expenses that are allocable to
tax-exempt income. However, if you receive a tax-exempt
parsonage allowance or a tax-exempt military housing
allowance, your expenses for mortgage interest and real
property taxes are deductible under the normal rules. No
deduction is allowed for other expenses allocable to the
tax-exempt allowance.

If some of the income is from a place of business other than
your home, you must first determine the part of your gross
income (Schedule C, line 7, and gains from Form 8949,
Schedule D, and Form 4797) from the business use of your
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
of your home, subtract from that amount the total expenses
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
but that are not allocable to the use of the home. Enter the result
on Form 8829, line 8.

Specific Instructions
Part I
Lines 1 and 2

To determine the area on lines 1 and 2, you can use square feet
or any other reasonable method if it accurately figures your
business percentage on line 7.
Do not include on line 1 the area of your home you used to
figure any expenses allocable to inventory costs. The business
percentage of these expenses should have been taken into
account in Schedule C, Part III.

Columns (a) and (b)
Enter as direct or indirect expenses only expenses for the
business use of your home (that is, expenses allowable only
because your home is used for business). If you did not operate
a business for the entire year, you can deduct only the expenses
paid or incurred for the portion of the year you used your home
for business. Other expenses not allocable to the business use
of your home, such as salaries, supplies, and business
telephone expenses, are deductible elsewhere on Schedule C
and should not be entered on Form 8829.

Special Computation for Certain Daycare Facilities
If the part of your home used as a daycare facility includes areas
used exclusively for business as well as other areas used only
partly for business, you cannot figure your business percentage
using Part I. Instead, follow these three steps:
1. Figure the business percentage of the part of your home
used exclusively for business by dividing the area used
exclusively for business by the total area of the home.
2. Figure the business percentage of the part of your home
used only partly for business by following the same method used
in Part I of the form, but enter on line 1 of your computation only
the area of the home used partly for business.
3. Add the business percentages you figured in the first two
steps and enter the result on line 7. Attach a statement with your
computation and enter “See attached computation” directly
above the percentage you entered on line 7.

Direct expenses benefit only the business part of your home.
They include painting or repairs made to the specific area or
rooms used for business. Enter 100% of your direct expenses on
the appropriate line in column (a).
Indirect expenses are for keeping up and running your entire
home. They benefit both the business and personal parts of your
home. Generally, enter 100% of your indirect expenses on the
appropriate line in column (b).
Exception. If the business percentage of an indirect expense
is different from the percentage on line 7, enter only the business
part of the expense on the appropriate line in column (a), and
leave that line in column (b) blank. For example, your electric bill
is $800 for lighting, cooking, laundry, and television. If you
reasonably estimate $300 of your electric bill is for lighting and
you use 10% of your home for business, enter $30 on line 20 in
column (a). Do not make an entry on line 20 in column (b) for any
part of your electric bill.

Line 4

Enter the total number of hours the facility was used for daycare
during the year.
Example. Your home is used Monday through Friday for 12
hours per day for 250 days during the year. It is also used on 50
Saturdays for 8 hours per day. Enter 3,400 hours on line 4
(3,000 hours for weekdays plus 400 hours for Saturdays).

Line 5

Lines 9, 10, and 11

If you started or stopped using your home for daycare in 2013,
you must prorate the number of hours based on the number of
days the home was available for daycare. Cross out the
preprinted entry on line 5. Multiply 24 hours by the number of
days available and enter the result.

Enter only the amounts that would be deductible whether or not
you used your home for business (that is, amounts allowable as
itemized deductions on Schedule A (Form 1040)).
Treat casualty losses as personal expenses for this step.
Figure the amount to enter on line 9 by completing Form 4684,
Section A.
If you are filing Schedule A, enter 10% of your adjusted gross
income excluding the gross income from business use of your
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Part III

home and the deductions attributable to that income when
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
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
use that Form 4684 to figure the amount of casualty losses to
deduct on Schedule A. Instead, complete a separate Form 4684
to deduct the personal portion of your casualty losses.

Lines 36 Through 38

Enter on line 36 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.

On line 10, include only the total of your mortgage interest
and qualified mortgage insurance premiums that would be
deductible on Schedule A and that qualifies as a direct or
indirect expense. Do not include mortgage interest on a loan that
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).

Enter on line 37 the cost or other basis of the land on which
your home sits, or, if less, the fair market value of the land on the
date you first used the home for business. Do not adjust this
amount for changes in fair market value after the year you first
used your home for business.

Treat qualified mortgage insurance premiums as personal
expenses for this step. Figure the amount to enter on line 10 by
completing Schedule A, line 13, in accordance with the
Schedule A (Form 1040) instructions. However, when figuring
your adjusted gross income (Form 1040, line 38) for this
purpose, exclude the gross income from business use of your
home and the deductions attributable to that income. Include on
Form 8829, line 10, the amount from Schedule A, line 13. See
the instructions for line 16, later, to deduct part of the qualified
mortgage insurance premiums not allowed because of the
adjusted gross income limit. Do not file or use that Schedule A to
figure the amount to deduct on line 13 of that schedule. Instead,
complete a separate Schedule A to deduct the personal portion
of your qualified mortgage insurance premiums.

Attach your own statement showing the cost or other basis of
additions and improvements, used at least partially for business,
that were placed in service after you began to use your home for
business. Do not include any amounts on lines 36 through 39 for
these expenditures. Instead, see the instructions for line 41.

Line 40
IF you first used your home for
THEN enter the following
business in the following month in percentage on line 40*...
2013...

If you itemize your deductions, be sure to claim only the
personal portion of your deductible mortgage interest, qualified
mortgage insurance premiums, and real estate taxes on
Schedule A. For example, if your business percentage on line 7
is 30%, you can claim 70% of your deductible mortgage interest,
qualified mortgage insurance premiums, and real estate taxes
on Schedule A.

Line 16

If the amount of home mortgage interest or qualified mortgage
insurance premiums you deduct on Schedule A is limited, enter
the part of the excess that qualifies as a direct or indirect
expense. Do not include mortgage interest on a loan that did not
benefit your home (explained earlier).

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%

*Exception. If the business part of your home is qualified Indian reservation property
(as defined in section 168(j)(4)), see Pub. 946, How To Depreciate Property, to figure
the depreciation.

Line 18

If you rent rather than own your home, include the rent you paid
on line 18, column (b). If your housing is provided free of charge
and the value of the housing is tax exempt, you cannot deduct
the rental value of any portion of the housing.

Line 21

Include on this line any 2013 operating expenses not included
on lines 9 through 20.

Line 28

Multiply your casualty losses in excess of the amount on line 9
by the business percentage of those losses and enter the result.

Line 34

Also, enter this amount on Form 4684, line 27, and enter "See
Form 8829" above line 27.

Line 35

If your home was used in more than one business, allocate the
amount shown on line 35 to each business using any method
that is reasonable under the circumstances. For each business,
enter on Schedule C, line 30, only the amount allocated to that
business.
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IF you first used your home for
business...

THEN the percentage to enter on
line 40 is...

after May 12, 1993, and before 2013
(except as noted below),

2.564%.*

after May 12, 1993, and before 1994,
and you either started construction or
had a binding contract to buy or build
that home before May 13, 1993,

the percentage given in
Pub. 946.

after May 12, 1993, and you stopped
using your home for business before
the end of the year,

the percentage given in
Pub. 946 as adjusted by the
instructions under Sale or Other
Disposition Before the Recovery
Period Ends in that publication.

after 1986 and before May 13, 1993,

the percentage given in
Pub. 946.

before 1987,

the percentage given in
Pub. 534, Depreciating Property
Placed in Service Before 1987.

Attach a statement showing your computation and include the
amount you figured in the total for line 41. Enter “See attached”
below the entry space.
Complete and attach Form 4562, Depreciation and
Amortization, only if:
You first used your home for business in 2013, or
You are depreciating additions and improvements placed in
service in 2013.
If you first used your home for business in 2013, enter the
amounts from Form 8829, lines 39 and 41, in columns (c) and
(g) of line 19i, Form 4562. In column (b) of line 19i, enter the
month and year you first used your home for business. Do not
include the amount from Form 8829, line 41, on Schedule C,
line 13.
If you are depreciating additions and improvements placed in
service in 2013, enter in column (b) of line 19i on Form 4562 the
month and year the additions or improvements were placed in
service. Enter the business basis of the additions or
improvements in column (c) and the depreciation allowable on
the additions or improvements in column (g). Do not include the
amount entered in column (g) on Schedule C, line 13.

*Exception. If the business part of your home is qualified Indian reservation property
(as defined in section 168(j)(4)), see Pub. 946 to figure the depreciation.

Line 41

Part IV

If no additions and improvements were placed in service after
you began using your home for business, multiply line 39 by the
percentage on line 40. Enter the result on lines 41 and 29.
IF additions and improvements
were placed in service...

If your expenses are greater than the current year's limit, you can
carry over the excess to 2014. The carryover will be subject to
the deduction limit for that year, whether or not you live in the
same home during that year.

THEN figure the depreciation
allowed on these expenditures by
multiplying the business part of
their cost or other basis by...

during 2013 (but after you began
using your home for business),

the percentage in the line 40
instructions for the month placed in
service.

after May 12, 1993, and before 2013
(except as noted below),

2.564%.*

after May 12, 1993, and before 1994,
and you either started construction or
had a binding contract to buy or build
that home before May 13, 1993,

the percentage given in
Pub. 946.

after May 12, 1993, and you stopped
using your home for business before
the end of the year,

the percentage given in Pub. 946 as
adjusted by the instructions under
Sale or Other Disposition Before the
Recovery Period Ends in that
publication.

after 1986 and before May 13, 1993,

the percentage given in
Pub. 946.

before 1987,

the percentage given in
Pub. 534.

Line 42

Figure the amount of operating expenses you can carry over to
2014 by subtracting line 26 from line 25. If the result is zero or
less, you have no amount to carry over.

Line 43

Figure the amount of excess casualty losses and depreciation
you can carry over to 2014 by subtracting line 32 from line 31. If
the result is zero or less, you have no amount to carry over.
For Paperwork Reduction Act Notice, see Form 1040
instructions.

*Exception. If the business part of your home is qualified Indian reservation property
(as defined in section 168(j)(4)), see Pub. 946 to figure the depreciation.

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