Business Use of Home Deduction & Form 8829

Business Use of Home Deduction is located at the end of the Expense section on the Schedule C page. 

Choose the method from the drop-down menu

- Simplified Method

- Simplified Method Detail

- Form 8829

Business Use in Square Feet 

 Enter the Business Use in Square Feet in the first box.

Total Home Square Feet

Enter the Total Home Square Feet in the second box.

Clicking "Save and Continue" will open Form 8829 (when applicable).

To edit the "Gross Income from Trade or Business page", and "Allowable Expenses page", click the "pencil". 

Gross Income from Trade or Business:

Gross Income may be edited by clicking the pencil. Any business income included in the Gross Income is from a place of business other than the home, you must edit this page. Daycare Business: When part of the home is not used regularly for the daycare business, you edit this page and complete the required section, 

Special Computation for Certain Daycare Facilities:

Enter the percentage use here if the daycare business in home includes areas that are both area used both exclusively and partially. You must include details explaining the calculation used to determine the percentage. 

To determine the total percentage, you must: (See complete text in IRS Form 8829 instructions)

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 Line 1, by only using 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 in the percentage box.

Gross Income from Trade or Business:

You will see the tentative profit from Schedule C displayed. Use the Override box to enter the amount of business income that is for business use of home.  

Gains or Losses from Forms 8949 and 4797:

• • Enter here, 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.

  • Enter as a positive amount any losses shown on Form 8949 (and included in Schedule D) or Form 4797 that is allowable to the trade or business in which  you use your home.

Daycare Where Area is not Exclusively Used for Daycare:

Caution: Only make entries here for Daycare businesses where the area of the home is not exclusive for daycare: 

If part of the home is exclusively and regularly used for providing daycare, leave these fields blank.

Time Used for Daycare:

• Days used for Daycare last year (current tax year): Enter the total amount of days used for the Daycare business.

• Hours used per day: In a 24 hour period, enter the total amount of hours the home is used for this Daycare business.

Number of days home was available for daycare:

Enter the total amount of days your home was used for this Daycare business. 

Click the pencil to edit your expenses.

Basis of Home:

This will be the smaller amount of the home's adjusted basis, or it's fair market value (FMV) on the date the home was first used for business.

Land Value Included Above:

Enter the total land value included in the basis of home.

Date Home Placed in Service - Business Use:

Enter the Date the home was first placed in service for this business.

Expenses have both a Direct and Indirect box. 

• • 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

• • Indirect expenses are for keeping up and running your entire home. They benefit both the business and personal parts of your home.

Only enter here expense amounts that qualify for the Business Use of Home Deduction and allocate between the business use of home total from the business conducted other places total. Only enter the business use of home totals here. 

Operating Expense Carryover:

Enter any carryover amount of unallowed operating expenses from your prior year Form 8829 here. 

Excess Casualty Loss and Depreciation Carryover:

Enter any carryover amount of unallowed excess casualty losses and depreciation expenses from your prior year Form 8829 here.