U.S. Individual Income Tax Return

2018

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 IRS.gov/Form8829.

What’s New
Excess real estate taxes. The itemized deduction of state and
local real estate taxes is now subject to a limit. See the
Instructions for Schedule A for more information about this
limitation. The amount that you can enter on Form 8829, line 11,
may not be the full amount of real estate taxes you paid with
regard to the business use of your home. The real estate taxes
you paid for business use of the home that exceed what can be
reported on line 11 will be reported on new line 17.
Expired tax benefits. At the time these instructions went to
print, the deduction for mortgage insurance premiums, formerly
included on lines 10 and 16, and the special recovery periods for
qualified Indian reservation property, formerly included on
line 41, had expired. You cannot claim a deduction for mortgage
insurance premiums for expenses paid or accrued after 2017 or
apply the special recovery periods to Indian reservation property
placed in service after 2017. To find out if legislation extended
these deductions so you can claim them on your 2018 return, go
to IRS.gov/Form8829.

Reminder
Simplified method used for 2017. If you used the simplified
method for 2017 but are not using it for 2018, you may have
unallowed expenses from a prior year Form 8829 that you can
carry over to your 2018 Form 8829. See the instructions for lines
25 and 31.

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 2019 of amounts not deductible in 2018.
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.
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
a partner or you are claiming these expenses on Schedule F
(Form 1040). Instead, complete the Worksheet To Figure the
Deduction for Business Use of Your Home in Pub. 587. (You
cannot claim expenses for business use of your home as an
employee.)
• 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.
Jan 14, 2019

• You have elected to use the simplified method for this home
for 2018. If you had more than one home during the year that
you used for business, you can use the simplified method for
only one home. 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
• 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 other 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

Cat. No. 15683B

Example. Your home is used Monday through Friday for 12
hours per day for 250 days during the year. It also is 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).

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.

Line 5

If you started or stopped using your home for daycare in 2018,
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.

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 also can 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.

Part II
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 is
allocable to the trade or business in which you use your home
but is 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.

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
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.

Expenses Related to Tax-Exempt Income

Part I

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.

Lines 1 and 2

Columns (a) and (b)

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.

Specific Instructions
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.

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 advertising, are
deductible elsewhere on Schedule C and should not be entered
on Form 8829.

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.

Special Computation for Certain Daycare Facilities

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).

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.

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 21 in
column (a). Do not make an entry on line 21 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.
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Lines 9, 10, and 11

home(s), do not claim mortgage interest in column (a) as a direct
expense, even if you use a separate structure in your home in
connection with your trade or business.
Mortgage interest reported on Schedule A. When you
figure your itemized deduction for mortgage interest on
Schedule A, include the following amounts of deductible
mortgage interest that you figured in Step 1 to the extent they
are not deducted on another form, such as Schedule E as a
rental expense.
• The amount of deductible mortgage interest you figured in
Step 1 that is not attributable to the home in which you
conducted the business.
• The personal portion of deductible mortgage interest you
included in column (b) of line 10. For example, if your business
percentage on line 7 is 30%, 70% of the amount you included in
column (b) of line 10 is deductible as an itemized deduction on
Schedule A.
Excess mortgage interest. See the instructions for line 16,
later, to deduct the part of your mortgage interest from loans
used to buy, build, or substantial improve the home in which you
conducted business that is not allowed on line 10 because of the
limits on deducting home mortgage interest as a personal
expense.

Use lines 9, 10, and 11 for business use of the home expenses
that would have been deductible as a personal expense if you
had not used your home for business. These expenses include
certain casualty losses, mortgage interest, and real estate taxes.
Taxpayers claiming the standard deduction. If you claim the
standard deduction, you will not include any mortgage interest or
real estate taxes on lines 10 and 11; instead, you will claim the
entire business use of the home portion of those expenses using
lines 16 and 17. If you are not increasing your standard
deduction by a net qualified disaster loss, then you will not
include any casualty losses on line 9; instead, you will claim the
entire business use of the home portion of your casualty losses
on line 29. If you are filing Schedule A to increase your standard
deduction by a net qualified disaster loss, see Casualty losses
reported on line 9, later.
You may prefer to itemize your deductions on

TIP Schedule A to claim amounts on lines 9, 10, and 11,

even if your total personal deductions are less than the
standard deduction.
Casualty losses reported on line 9. Figure the amount to
include in column (b) of line 9 as follows.
Step 1. Complete a worksheet version of Section A of Form
4684 treating all your casualty losses (and gains) as personal
expenses. If you are itemizing your deductions, when completing
line 17 of this worksheet version of Form 4684, enter 10% of
your adjusted gross income excluding the gross income and
deductions attributable to the business use of the home. Do not
file this worksheet version of Form 4684; instead, keep it for your
records. You will complete a separate Form 4684 to attach to
your return using only the personal portion of your casualty
losses (and gains) for Section A.
Step 2. Include in column (b) of line 9 the loss amounts from
lines 15 and 18 of this worksheet version of Form 4684 that are
attributable to the home in which you conducted the business
and are the result of a federally declared disaster. If you are
claiming an increased standard deduction instead of itemizing
your deductions, only use a net qualified disaster loss on line 15
of the worksheet version of Form 4684 for this Step 2.
See the instructions for line 35, later, for the business use the
home casualty losses that you must include in Section B of the
separate Form 4684 you attach to your return.
Casualty losses reported on Schedule A. Use only the
personal portion of your casualty losses (and gains) when
completing Section A of the separate Form 4684 you attach to
your return. The separate Form 4684 you attach to your return is
used to figure the casualty losses you can include on line 15 of
Schedule A and the net qualified disaster losses you can include
on line 16 of Schedule A.
Excess casualty losses. See the instructions for line 29,
later, to deduct the part of your casualty losses for business use
of your home not allowed because of the limits on deducting
casualty losses as a personal expense, including any losses that
are not the result of a federally declared disaster.

Real estate taxes reported on line 11. If you are claiming the
standard deduction, do not report an amount on line 11. If you
itemize your deductions, figure the amount to include on line 11
as follows.
Step 1. If the total of your state and local income (or, if elected
on your Schedule A, general sales) taxes, real estate taxes, and
personal property taxes is not more than $10,000 ($5,000 if
married filing separately), enter all the real estate taxes
attributable to the home in which you conducted business in
column (b) of line 11.
Step 2. If you do not meet the condition of Step 1, use the
following worksheet to figure the amount to include in column (a)
of line 11.

Line 11 Worksheet
1.

2.
3.

4.
5.
6.

Enter your state and local income taxes (or, if you elect
on Schedule A, your state and local general sales
taxes) that are personal expenses . . . . . . . . .
Enter all the state and local real estate taxes you paid
on the home in which you conducted business . .
Enter any other state and local real estates taxes you
paid that are a personal expense and not included in
line 2 . . . . . . . . . . . . . . . . . . . . . . . . .
Enter your state and local personal property taxes that
are a personal expense . . . . . . . . . . . . . . .
Add lines 1 through 4 . . . . . . . . . . . . . . . .

7.

Multiply line 2 by the percentage on Form 8829,
line 7 . . . . . . . . . . . . . . . . . . . . . . .
Subtract line 6 from line 2 . . . . . . . . . . . .

8.

Subtract line 6 from line 5

9.

2.

3.
4.
5.

. .

6.

. .

7.

. . . . . . . . . . . . . .

8.

Subtract line 8 from $10,000 ($5,000 if married filing
separately). If zero or less, enter -0- . . . . . . . .
10. Real estate taxes reported on line 11. Enter the
smaller of line 6 or line 9 here and in column (a) of
Form 8829, line 11 . . . . . . . . . . . . . . . . . .
11. Excess real estate taxes reported on line 17.
Subtract line 10 from line 6 . . . . . . . . . . . . .

Mortgage interest reported on line 10. If you are claiming the
standard deduction, do not report an amount on line 10. If you
itemize your deductions, figure the amount to include in column
(b) of line 10 as follows.
Step 1. Treat all the mortgage interest you paid as a personal
expense and figure the amount that would be deductible as an
itemized deduction on Schedule A. See Pub. 936 for more
information about figuring the home mortgage interest deduction
and the limits that may apply.
Step 2. Include in column (b) of line 10 the amount of
deductible mortgage interest figured in Step 1 that is attributable
to the home in which you conducted the business.
Because the limits on deducting mortgage interest as a
personal expense are figured using all loans secured by your

1.

9.

10.
11.

Real estate taxes reported on Schedule A. When you
figure your itemized deduction for state and local taxes on
Schedule A, only include the personal portion of your real estate
taxes on line 5b of Schedule A.
Excess real estate taxes. See the instructions for line 17,
later, to deduct the part of your real estate taxes for the home in
which you conducted business that is not allowed on line 11
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of excess casualty losses and depreciation shown in Part IV of
the last Form 8829, if any, that you filed to claim a deduction for
business use of the home.

because of the limitation on deducting state and local taxes as a
personal expense.

Line 16

For example, if you filed a 2016 Form 8829 and you used the
simplified method for 2017 but are not using it for 2018, enter the
amount from line 6b of your 2017 Simplified Method Worksheet
(or line 43 of your 2016 Form 8829).

Taxpayers claiming the standard deduction. If you are
claiming the standard deduction, enter all the home mortgage
interest paid for loans used to buy, build, or substantially
improve the home in which you conducted business in column
(b) of line 16. 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).

Line 35

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

Taxpayers itemizing deductions on Schedule A. If the
amount you figured in Step 1 under Mortgage interest reported
on line 10, earlier, was less than the full amount of interest you
paid because of the limits on deducting home mortgage interest
as a personal expense, include the excess attributable to the
loans used to buy, build, or substantially improve the home in
which you conducted business in column (b) of line 16.
Example. If you paid $15,000 of home mortgage interest on
loans used to buy, build, or substantially improve the home in
which you conducted business but would only be able to deduct
$12,000 on Schedule A because of the limits that apply to
deducting home mortgage interest as a personal expense, enter
$3,000 ($15,000 - $12,000 = $3,000) in column (b) of line 16.

Line 36

If your home was used in more than one business, allocate the
amount shown on line 36 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.

Part III

Lines 37 Through 40

Enter on line 37 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.

Line 17
Taxpayers claiming the standard deduction. If you are
claiming the standard deduction, enter all the real estate taxes
paid on the home in which you conducted business in column (b)
of line 17.

Enter on line 38 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.

Taxpayers itemizing deductions on Schedule A. If you
used the Line 11 Worksheet to figure the amount to include in
column (a) of line 11, then include the amount from line 11 of the
Line 11 Worksheet in column (a) of line 17; otherwise, do not
enter an amount on line 17.

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 37 through 40 for
these expenditures. Instead, see the instructions for line 42.

Line 19

If you rent rather than own your home, include the rent you paid
on line 19, column (b).

Line 41

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.

THEN enter the following
IF you first used your home for
business in the following month in percentage on line 41...
2018...

Line 22

Include on this line any 2018 operating expenses not included
on lines 9 through 21.

January

2.461%

February

2.247%

Line 25

March

2.033%

April

1.819%

If you did not file a 2017 Form 8829, then your carryover of
prior year operating expenses is the amount of operating
expenses shown in Part IV of the last Form 8829, if any, that you
filed to claim a deduction for business use of the home.

May

1.605%

June

1.391%

July

1.177%

August

0.963%

September

0.749%

October

0.535%

November

0.321%

December

0.107%

Enter any amount from your 2017 Form 8829, line 42.

For example, if you filed a 2016 Form 8829 and you used the
simplified method for 2017 but are not using it for 2018, enter the
amount from line 6a of your 2017 Simplified Method Worksheet
(or line 42 of your 2016 Form 8829).

Line 29

Multiply the casualty losses attributable to the home in which you
conducted business that are in excess of the amount reported
on line 9 (if any) by the business percentage of those losses and
enter the result.

Line 31

Enter any amount from your 2017 Form 8829, line 43.
If you did not file a 2017 Form 8829, then your carryover of
prior year excess casualty losses and depreciation is the amount
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IF you first used your home for
business...

THEN the percentage to enter on
line 41 is...

after May 12, 1993, and before 2018
(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 42. 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 2018, or
• You are depreciating additions and improvements placed in
service in 2018.
If you first used your home for business in 2018, enter the
amounts from Form 8829, lines 40 and 42, 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 42, on Schedule C,
line 13.
If you are depreciating additions and improvements placed in
service in 2018, 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 was Indian reservation property
that met the requirements of section 168(j) when placed in service, see Pub.
946 to figure the depreciation.

Part IV

If your expenses are greater than the current year's limit, you can
carry over the excess to 2019. The carryover will be subject to
the deduction limit for that year, whether or not you live in the
same home during that year.

Simplified method used for 2017. If you used the simplified
method for 2017, use the preceding table to find the percentage
to enter.

Line 43

Example. You first used your home for business in 2017 and
used the simplified method for that year. For 2018, you want to
use Form 8829 instead. Enter 2.564%.

Figure the amount of operating expenses you can carry over to
2019 by subtracting line 27 from line 26. If the result is zero or
less, you have no amount to carry over.

Line 42

Line 44

If no additions and improvements were placed in service after
you began using your home for business, multiply line 40 by the
percentage on line 41. Enter the result on lines 42 and 30.
IF additions and improvements
were placed in service...

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

during 2018 (but after you began
using your home for business),

the percentage in the line 41
instructions for the month placed in
service.

after May 12, 1993, and before 2018
(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.

Figure the amount of excess casualty losses and depreciation
you can carry over to 2019 by subtracting line 33 from line 32. If
the result is zero or less, you have no amount to carry over.
Paperwork Reduction Act Notice. For Paperwork Reduction
Act Notice, see the Instructions for Form 1040.

*Exception. If the business part of your home was Indian reservation property
that met the requirements of section 168(j) when placed in service, see Pub.
946 to figure the depreciation.

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