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Publication 587
taxmap/pubs/p587-008.htm#en_us_publink1000226411

Where To Deduct(p18)

rule
Deduct expenses for the business use of your home on Form 1040. Where you deduct these expenses on the form depends on whether you are:
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

Self-Employed Persons(p18)

rule
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 32 of Schedule F (Form 1040). Enter "Business Use of Home" on the dotted line beside the entry.
taxmap/pubs/p587-008.htm#en_us_publink1000226413

Deductible mortgage interest.(p18)

rule
If 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 (Form 1040) 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 32 of Schedule F (Form 1040). Enter "Business Use of Home" on the dotted line beside the entry. 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 (Form 1040), 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_publink1000226414

Qualified mortgage insurance premiums.(p18)

rule
If 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 (Form 1040) 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 32 of Schedule F (Form 1040). Enter "Business Use of Home" on the dotted line beside the entry. 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 (Form 1040), 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_publink1000226415

Real estate taxes.(p18)

rule
If 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 32 of Schedule F (Form 1040). Enter "Business Use of Home" on the dotted line beside the entry. Enter the nonbusiness part of your real estate taxes on line 6 of Schedule A (Form 1040).
EIC
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 (Form 1040). 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 (Form 1040).
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Casualty losses.(p19)

rule
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 30 of Form 4684, Section B. Enter "See Form 8829" above line 30.
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 30 of Form 4684, Section B. Enter "See attached statement" above line 30.
taxmap/pubs/p587-008.htm#en_us_publink1000226418

Other expenses.(p19)

rule
If 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 (Form 1040), line 32. Enter "Business Use of Home" on the dotted line beside the entry. 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_publink1000226419

Business expenses not for the use of your home.(p19)

rule
Deduct 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_publink1000226420

Employees(p19)

rule
As 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, Wage and Tax Statement, 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.
However, you can use the simpler Form 2106-EZ, instead of Form 2106, if you meet the following requirements.
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.
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_publink1000226421

Adequately accounting to employer.(p19)

rule
You 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_publink1000226422

Deductible mortgage interest.(p19)

rule
Although 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 (Form 1040), 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_publink1000226423

Qualified mortgage insurance premiums.(p20)

rule
Although 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 (Form 1040), 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_publink1000226424

Real estate taxes.(p20)

rule
Deduct both the business and nonbusiness parts of your real estate taxes on line 6 of Schedule A (Form 1040). For more information on amounts allowable as a deduction for real estate taxes, see Publication 530.
taxmap/pubs/p587-008.htm#en_us_publink1000226425

Casualty losses.(p20)

rule
Enter 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 27. Enter "See attached statement" above line 27.
taxmap/pubs/p587-008.htm#en_us_publink1000226426

Other expenses.(p20)

rule
If you file Form 2106 or Form 2106-EZ, report on line 4 the following expenses. 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 (Form 1040), 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 (Form 1040), line 21.
taxmap/pubs/p587-008.htm#en_us_publink1000226427

Example.(p20)

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
Advertising1,300
Telephone200
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%) 2,0004,500
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.
ExpenseAmountSchedule A
Deductible mortgage interest$1,500Line 10 or 11*
Real estate taxes$1,000Line 6*
Expenses not related to the business use of the home$2,000Line 21**
Otherwise nondeductible expenses$800Line 21**
Depreciation$700Line 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_publink1000226431

Partners(p20)

rule
You 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_publink1000226432

Deducting unreimbursed partnership expenses.(p21)

rule
See the following forms and related instructions for information about deducting unreimbursed partnership expenses.
taxmap/pubs/p587-008.htm#en_us_publink1000226433

More information.(p21)

rule
For more information about partners and partnerships, see Publication 541, Partnerships.