Publication 587
taxmap/pubs/p587-008.htm#en_us_publink1000226411Deduct expenses for the business use of your home on Form 1040.
Where you deduct these expenses on the form depends on whether you are:
- A self-employed person, or
- An employee.
If you are a partner, see
Partners, later, for information on where to deduct expenses for the
business use of your home.
taxmap/pubs/p587-008.htm#en_us_publink1000226412
If you are self-employed and file Schedule C (Form 1040), complete and attach
Form 8829 to your return.
If you file Schedule F (Form 1040), report your entire deduction for business
use of the home (line 33 of the
Worksheet To Figure the Deduction for Business Use of Your Home), up to the deduction limit discussed under
Figuring the Deduction, earlier, on line 34 of Schedule F. Enter "Business Use of
Home" on the dotted line beside the entry.
taxmap/pubs/p587-008.htm#en_us_publink1000226413If you file Schedule C (Form 1040), enter all your deductible
mortgage interest on line 10 of Form 8829. After you have figured the business
part of the mortgage interest on lines 12 and 13, subtract that amount from the
total on line 10. The remainder is deductible on Schedule A (Form 1040), line 10
or 11. If the interest you deduct on Schedule A for your home mortgage is
limited, enter the excess on line 16 of Form 8829.
If you file Schedule F (Form 1040), include the business part
of your deductible home mortgage interest with your total business use of the
home expenses on line 34. You can use the
Worksheet To Figure the Deduction for Business Use of Your Home, later in this publication, to figure the deductible part of
mortgage interest. Enter the nonbusiness part of the deductible mortgage
interest on Schedule A, line 10 or 11.
To determine if the limits on qualified home mortgage interest
apply to you, see the Instructions for Schedule A (Form 1040) or Publication
936.
taxmap/pubs/p587-008.htm#en_us_publink1000226414If you file Schedule C (Form 1040), enter all your deductible
qualified mortgage insurance premiums on line 10 of Form 8829. After you have
figured the business part of the qualified mortgage insurance premiums on lines
12 and 13, subtract that amount from the qualified mortgage insurance premiums
included on line 10. The remainder is deductible on Schedule A (Form 1040), line
13. If the premiums you deduct on Schedule A are limited, include the excess
with any excess mortgage interest and enter the total on line 16 of Form 8829.
If you file Schedule F (Form 1040), include the business part
of your deductible qualified mortgage insurance premiums with your total
business use of the home expenses on line 34. You can use the
Worksheet To Figure the Deduction for Business Use of Your Home, later in this publication, to figure the deductible part of
qualified mortgage insurance premiums. Enter the nonbusiness part of the
qualified mortgage insurance premiums on Schedule A, line 13.
To determine if the limits on qualified mortgage insurance premiums
apply to you, see the Instructions for Schedule A (Form 1040) or Publication
936.
taxmap/pubs/p587-008.htm#en_us_publink1000226415If you file Schedule C (Form 1040), enter all your deductible
real estate taxes on Form 8829, line 11. After you have figured the business
part of your taxes on lines 12 and 13, subtract that amount from your total real
estate taxes on line 11. The remainder is deductible on Schedule A (Form 1040),
line 6.
If you file Schedule F (Form 1040), include the business part
of real estate taxes with your total business use of the home expenses on line
34. Enter the nonbusiness part of your real estate taxes on line 6 of Schedule
A.
 |
If you itemize your deductions, be sure to include only the personal part of
your deductible mortgage interest, qualified mortgage insurance premiums, and
real estate taxes on Schedule A (Form 1040). Do not deduct any of the business
part on Schedule A. For example, if your business percentage on Form 8829, line
7, or line 3 of the Worksheet To Figure the Deduction for Business Use of Your
Home, later, is 30%, you can deduct only 70% of your deductible mortgage
interest, qualified mortgage insurance premiums, and real estate taxes as
personal expenses on Schedule A. |
taxmap/pubs/p587-008.htm#en_us_publink1000226417
If you are using Form 8829, refer to the specific instructions for line 9 and
enter the amount from line 34 of Form 8829 on line 33 of Form 4684, Section B.
Enter "See Form 8829" above line 33.
If you file Schedule F (Form 1040), enter the business part of casualty losses
(line 32 of the
Worksheet To Figure the Deduction for Business Use of Your Home) on line 33 of Form 4684, Section B. Enter "See attached statement"
above line 33.
taxmap/pubs/p587-008.htm#en_us_publink1000226418If you file Schedule C (Form 1040), report the other home expenses
that would not be allowable if you did not use your home for business
(insurance, maintenance, utilities, depreciation, etc.) on the appropriate lines
of your Form 8829. If you rent rather than own your home, report the rent you
paid on line 18 of Form 8829. If these expenses exceed the deduction limit,
carry the excess over to next year. The carryover will be subject to next year's
deduction limit.
If you file Schedule F (Form 1040), include your otherwise nondeductible
expenses (insurance, maintenance, utilities, depreciation, etc.) with your total
business use of the home expenses on Schedule F, line 34. If these expenses
exceed the deduction limit, carry the excess over to the next year. The
carryover will be subject to next year's deduction limit.
taxmap/pubs/p587-008.htm#en_us_publink1000226419Deduct in full your business expenses that are not for the use
of your home itself (dues, salaries, supplies, certain telephone expenses, etc.)
on the appropriate lines of Schedule C (Form 1040) or Schedule F (Form 1040).
These expenses are not for the use of your home, so they are not subject to the
deduction limit for business use of the home expenses.
taxmap/pubs/p587-008.htm#en_us_publink1000226420As an employee, you must itemize deductions on Schedule A (Form
1040) to claim a deduction for the business use of your home and any other
employee business expenses. This generally applies to all employees, including
outside salespersons. If you are a statutory employee, use Schedule C (Form
1040) to claim the expenses. Follow the instructions given earlier under
Self-Employed Persons.
The statutory employee box within box 13 on your Form W-2 will
be checked if you are a statutory employee.
If you have employee expenses for which you were not reimbursed,
report them on Schedule A (Form 1040), line 21. You also generally must complete
Form 2106 if either of the following apply.
- You claim any job-related vehicle, travel, transportation,
meal, or entertainment expenses.
- Your employer paid you for any of your job expenses reportable
on line 21 of Schedule A. (Amounts your employer included in box 1 of your Form
W-2 are not considered paid by your employer.)
However, you can use the simpler Form 2106-EZ, instead of Form
2106, if you meet the following requirements.
- You were not reimbursed for your expenses by your employer,
or if you were reimbursed, the reimbursement was included in box 1 of your Form
W-2.
- If you claim car expenses, you use the standard mileage rate.
When your employer pays for your expenses using a reimbursement
or allowance arrangement, the payments generally should not be on your Form W-2
if all the following rules for an accountable plan are met.
- You adequately account to your employer for the expenses within
a reasonable period of time.
- You return any payments not spent for business expenses (excess
reimbursements) within a reasonable period of time.
- You must have paid or incurred deductible expenses while performing
services as an employee.
If you meet the accountable plan rules and your business expenses
equal your reimbursement, do not report the reimbursement as income and do not
deduct the expenses.
taxmap/pubs/p587-008.htm#en_us_publink1000226421You adequately account to your employer when you give your employer
documentary evidence of your travel, mileage, and other employee business
expenses, such as receipts, along with an account book, diary, or similar record
in which you entered each expense at or near the time you had it.
You also may be treated as adequately accounting to your employer
if your employer gives you a per diem or car allowance similar in form to, and
not more than, the federal rate and you verify the time, place, and business
purpose of each expense. For more information, see Publication 463 and the
Instructions for Form 2106.
taxmap/pubs/p587-008.htm#en_us_publink1000226422Although you generally deduct expenses for the business use of
your home on Schedule A (Form 1040), line 21, unreimbursed employee expenses, do
not include any deductible home mortgage interest on that line. Instead, deduct
both the business and nonbusiness parts of this interest on line 10 or 11 of
Schedule A (Form 1040).
If the home mortgage interest you can deduct on lines 10 or 11
is limited by the home mortgage interest rules, you cannot deduct the excess as
an employee business expense on Schedule A, line 21, even though you use part of
your home for business. To determine if the limits on home mortgage interest
apply to you, see Publication 936 or the Instructions for Schedule A (Form
1040).
taxmap/pubs/p587-008.htm#en_us_publink1000226423Although you generally deduct expenses for the business use of
your home on Schedule A (Form 1040), line 21, do not include any deductible
qualified mortgage insurance premiums on that line. Instead, deduct both the
business and nonbusiness parts of these premiums on line 13 of Schedule A (Form
1040).
If the qualified mortgage insurance premiums you can deduct on
line 13 is limited, you cannot deduct the excess as an employee business expense
on Schedule A, line 21, even though you use part of your home for business. To
determine if you can deduct mortgage insurance premiums and if any limits apply
to you, see Publication 936 and
Line 13 in the Instructions for Schedule A (Form 1040).
taxmap/pubs/p587-008.htm#en_us_publink1000226424Deduct both the business and nonbusiness parts of your real estate
taxes on line 6 of Schedule A. For more information on amounts allowable as a
deduction for real estate taxes, see Publication 530, Tax Information for
First-Time Homeowners.
taxmap/pubs/p587-008.htm#en_us_publink1000226425Enter the business part of casualty losses (line 32 of the
Worksheet To Figure the Deduction for Business Use of Your Home, later) on Form 4684, Section B, line 30. Enter "See attached
statement" above line 30.
taxmap/pubs/p587-008.htm#en_us_publink1000226426If you file Form 2106 or Form 2106-EZ, report on line 4 the following
expenses.
- The business part of your otherwise nondeductible expenses
(utilities, maintenance, insurance, depreciation, etc.) that do not exceed the
deduction limit.
- The employee business expenses not related to the use of your
home, such as advertising.
Add these to your other employee business expenses and complete
the rest of the form. Enter the total from Form 2106, or Form 2106-EZ, on
Schedule A, line 21, where it is subject to the 2%-of-adjusted-gross-income
limit. If you do not have to file Form 2106 or Form 2106-EZ, enter your total
expenses directly on Schedule A, line 21.
You are an employee who works at home for the convenience of
your employer. You meet all the requirements to deduct expenses for the business
use of your home. Your employer does not reimburse you for any of your business
expenses and you are not otherwise required to file Form 2106 or Form 2106-EZ.
As an employee, you do not have gross receipts, cost of goods
sold, etc. You begin with gross income from the business use of your home, which
you determine to be $6,000.
The percentage of expenses due to the business use of your home
is 20%. You have the following expenses.
| Deductible mortgage interest (20%) | $1,500 |
| Real estate taxes (20%) | 1,000 |
| Total | $2,500 |
| Expenses not related to business use of the home (100%): | |
| Supplies | $500 |
| Advertising | 1,300 |
| Telephone | 200 |
| Total | $2,000 |
| Otherwise nondeductible expenses: | |
| Maintenance (20%) | $200 |
| Utilities (20%) | 350 |
| Insurance (20%) | 250 |
| Total | $800 |
| Depreciation (20%) | $1,600 |
| | |
Based on the above expenses, you figure your deduction limit
as follows.
| Gross income | | $6,000 |
| Less: | | |
| Deductible mortgage interest (20%) | $1,500 | |
| Real estate taxes (20%) | 1,000 | |
| Expenses not related to business use of the home (100%) | 2,000 | 4,500 |
| Deduction limit | | $1,500 |
Your deduction for otherwise nondeductible expenses and depreciation
is limited to $1,500. You can deduct all your otherwise nondeductible expenses
($800) and $700 ($1,500 − $800) of your depreciation.
You deduct your expenses for business use of your home on Schedule
A (Form 1040) as shown in the following table.
| Expense | Amount | Schedule A |
|---|
| Deductible mortgage interest | $1,500 | Line 10 or 11* |
| Real estate taxes | $1,000 | Line 6* |
| Expenses not related to the business use of the home | $2,000 | Line 21** |
| Otherwise nondeductible expenses | $800 | Line 21** |
| Depreciation | $700 | Line 21** |
| *In addition to the 80% nonbusiness part of the expense. |
| **Subject to the 2%-of-adjusted-gross-income limit. |
You can carry over the $900 ($1,600 – $700) of depreciation
that exceeds the deduction limit to next year, subject to the deduction limit
for that year.
taxmap/pubs/p587-008.htm#en_us_publink1000226431You may be allowed to deduct unreimbursed ordinary and necessary
expenses you paid on behalf of the partnership (including qualified expenses for
the business use of your home) if you were required to pay these expenses under
the partnership agreement.
Use the
Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication, to figure the deduction
for the business use of your home.
taxmap/pubs/p587-008.htm#en_us_publink1000226432See the following forms and related instructions for information
about deducting unreimbursed partnership expenses.
- Schedule E (Form 1040), Supplemental Income and Loss.
- Schedule SE (Form 1040), Self-Employment Tax.
- Schedule K-1 (Form 1065), Partner's Share of Income, Credits,
Deductions, etc.
For more information about partners and partnerships, see Publication
541, Partnerships.
Previous Page |
Table of Contents |
Index |
Next Page
