| IRS Form 8829 is used to claim the allowable | | | | fixed location where you conduct those activities |
| expenses that you can deduct for business use of | | | | Deductions |
| your home on your federal tax return. From Form | | | | You generally cannot deduct expenses that are |
| 8829, you calculate the deduction amount to be | | | | allocable to tax-exempt income. To calculate |
| inserted on Schedule C (Form 1040). To deduct | | | | deductions, you can use square feet or any other |
| expenses related to the part of your home used for | | | | reasonable method to measure the area for the part |
| business, you must meet the following tests: | | | | of your home used for your business. Direct or indirect |
| 1. Your use of the business part of your home must be | | | | expenses for the business use of your home can be |
| either: | | | | 100% deductions. |
| Exclusive: You must use a specific area of your home | | | | You can deduct the depreciation of the part of your |
| only for your trade or business, and the area cannot | | | | home you use for business by using the cost or the |
| be used for any other purpose. The area can be a | | | | fair market value of your home on the date you first |
| room or other separately identifiable space. The space | | | | used the home for business. You will need to attach a |
| does not need to be marked off by a permanent | | | | schedule showing the cost of additions and |
| partition. | | | | improvements placed in service after you began to |
| Regular: You must use a specific area of your home | | | | use your home for business. Then you refer to the |
| for business on a continuing basis, not just occasional | | | | IRS chart in the instructions booklet for the use of |
| or incidental use; or | | | | Form 8829 to find the percentage to use to calculate |
| 2. The business part of your home or a separate | | | | the depreciation deduction. |
| structure (not attached to your home) must be your | | | | If your expenses are greater than the current year's |
| principal place of business where you meet or deal | | | | limit, you can carry over the excess to the next tax |
| with patients, clients, or customers in the normal course | | | | year. For more information on deducting expenses for |
| of your business. You must conduct the administrative | | | | the business use of the home expenses, see IRS Pub. |
| or management activities of your business in your | | | | 587. |
| home exclusively and regularly, and you have no other | | | | |