Form 8829, line by line

Line numbers are from the 2025 Form 8829 and its instructions, the latest the IRS has released. The IRS usually publishes the next year's version late in the year; check it for changes before you file.

Who files it — and who doesn't

File Form 8829 with Schedule C if you're claiming the home office by the regular method. Use a separate form for each home you used for business. Don't use it if:

• You use the simplified method ($5 a square foot). That's a worksheet in the Schedule C instructions instead.
• You're a partner, or a farmer filing Schedule F. There's a worksheet in IRS Publication 587 for you.
• You're an employee — including the owner of an S corporation. Employees can't deduct it on their own return; see the home office for S corporation owners.
• All the costs belong in inventory, which is figured in Part III of Schedule C.

And the space has to qualify first — regular and exclusive use, as your principal place of business or where you meet clients. The requirements are here.

Part I: the business percentage (lines 1–7)

Line 1 is the office's area, line 2 the whole home's, and line 3 divides them. Everyone except a daycare that isn't used only for business carries line 3 straight to line 7. That percentage is used for the rest of the form.

Part II: the deduction and its limit (lines 8–36)

Line 8 is the ceiling. It's usually your tentative profit from Schedule C, line 29. The home office can't turn that into a loss; anything over the limit carries to next year in Part IV. If some of your income is earned somewhere other than home, the instructions have you use only the part from the home office.

Columns (a) and (b). Column (a) is for direct expenses — costs for the office alone, like painting it, which count in full. Column (b) is for indirect expenses — costs for the whole home — which the form multiplies by your percentage. Costs unrelated to the home, like supplies or advertising, stay on Schedule C and never go on this form.

Mortgage interest and real estate taxes are where people go wrong:

• If you take the standard deduction, leave lines 10 and 11 empty. Put the mortgage interest on loans used to buy, build or substantially improve the home on line 16, and the real estate taxes on line 17, both in column (b).
• If you itemize, put the deductible amounts on lines 10 and 11, column (b). Lines 16 and 17 take only what the personal limits cut off. If your state and local taxes reach the SALT limit, the instructions' Line 11 Worksheet splits the real estate taxes between lines 11 and 17. The personal share of what's on lines 10 and 11 still goes on Schedule A.
• Mortgage interest never goes in column (a), even for a separate structure.

Then insurance on line 18, rent on line 19 if you rent, repairs on line 20, utilities on line 21, and anything else on line 22. Line 25 brings in last year's operating-expense carryover (last year's line 43).

Line 27 is the operating expenses you can take this year: the smaller of what's left of the limit (line 15) and what you spent (line 26). Depreciation and excess casualty losses come after, on lines 28–33, only if there's room left under the limit. Line 36 is the result, and it goes on Schedule C, line 30.

Part III: depreciation (lines 37–42)

Only if you own the home. Line 37 is the smaller of what you paid for the home (with the land) and what it was worth when you started using it for business. Take out the land on line 38 — land isn't depreciated — and line 40 is the office's share of the building. For a home you first used for business before 2025, the percentage on line 41 is 2.564% a year; in the first year it's smaller, from a month-by-month table in the instructions, and that's the one year you also file Form 4562.

Depreciation lowers your taxes now, but the amount you took, or could have taken, is taxed when you sell the home. More on that.

Part IV: carryovers (lines 43–44)

Anything the income limit kept you from deducting carries to next year: operating expenses on line 43, depreciation and excess casualty losses on line 44. Next year they come back on lines 25 and 31. If you switch to the simplified method for a year, the carryover waits until you use Form 8829 again.

A filled-in example

A sole proprietor with $90,000 of tentative profit works from a 240-square-foot office in a 2,000-square-foot home they own, first used for business before 2025. They take the standard deduction. The home costs $22,500 a year, and they had the office painted for $300.

The result, $4,108, goes on Schedule C, line 30. The simplified method would have given 240 × $5 = $1,200. Lines left out of the table are blank or zero for this owner. Compare the two methods for your home →

Mistakes to avoid

• Putting mortgage interest and property tax on lines 10 and 11 when you take the standard deduction.
• Deducting the office's share of mortgage interest again in full on Schedule A.
• Depreciating the land along with the building.
• Entering costs unrelated to the home, like supplies, on Form 8829 instead of Schedule C.
• Filing it as an S corporation owner, or for a space that isn't used only for the business.

Whether your office qualifies and how to fill in your own form is a question for your CPA or tax attorney.