Page 198 - Individual Forms & Instructions Guide

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For additional information about in any reasonable manner you choose, actual expenses to figure your deduc-
claiming this deduction, see Pub. 587. but you may not allocate more square tion.
feet to a qualified business use than you
If you are not using the simpli- Depreciation of home. You cannot
TIP fied method to determine the actually use in that business. deduct any depreciation (including any
amount of expenses you may If you used your home for more additional first-year depreciation) or sec-
deduct for business use of a home, do ! than one business, you will tion 179 expense for the portion of your
not complete the additional entry spaces CAUTION need to file a separate Sched- home that is used in a qualified business
on line 30 for total square footage of ule C for each business. Do not combine use if you figure the deduction for the
your home and of the part of the home your deductions for each business use business use of your home using the
used for business. Just include the on a single Schedule C. simplified method. The depreciation de-
amount from line 36 of your Form 8829 duction allowable for that portion of the
on line 30. Business use of more than one home for that year is deemed to be zero.
home. You may have used more than
Simplified method. The simplified one home in your business. If you used Although you cannot deduct
method is an alternative to the calcula- more than one home for the same busi- TIP any depreciation or section 179
tion, allocation, and substantiation of ac- ness during 2022, you may elect to use expense for the portion of your
tual expenses. In most cases, you will the simplified method for only one home that is a qualified business use be-
figure your deduction by multiplying the home; you must file a Form 8829 to cause you elect to use the simplified
area (measured in square feet) used reg- claim a business use of the home deduc- method, you may still claim depreciation
ularly and exclusively for business, reg- tion for any additional home. If one or or the section 179 expense deduction on
ularly for daycare, or regularly for stor- more of the homes were not used for the other assets (for example, furniture and
age of inventory or product samples, by entire year (for example, you moved equipment) used in the qualified busi-
$5. The area you use to figure your de- during the year), see Part-year use or ness use of your home.
duction cannot exceed 300 square feet. area changes (for simplified method on-
You cannot use the simplified method to ly), later, and Columns (a) and (b) in the Figuring your allowable expenses for
business use of the home. You will
figure a deduction for rental use of your Instructions for Form 8829.
home. figure the deduction using Form 8829 or
Other requirements must still be the Simplified Method Worksheet, or
Electing to use the simplified meth- met. You must still meet all the use re- both.
od. You choose whether or not to use quirements to claim a deduction for You may not use the simplified
the simplified method each tax year. business use of the home. The simplified method and also file Form
Make the election by using the simpli- method is only an alternative to the cal- ! 8829 for the same qualified
CAUTION
fied method to figure the deduction for culation, allocation, and substantiation business use of the same home.
the qualified business use of a home on of actual expenses. The simplified meth-
a timely filed, original federal income od is not an alternative to the exclusivity Using Form 8829. Use Form 8829
tax return for that year. An election for a and other tests that must be met in order to figure and claim this deduction for a
year, once made, is irrevocable. A to qualify for this deduction. For more home if you are not or cannot use the
change from using the simplified meth- information about qualifying business simplified method for that home. For in-
od in one year to actual expenses in a uses, see Qualifying for a Deduction in formation about claiming this deduction
succeeding year, or vice versa, is not a Pub. 587. using Form 8829, see the Instructions
change in method of accounting and for Form 8829 and Pub. 587.
does not require the consent of the Com- Gross income limitation. The
missioner. amount of your deduction is still limited Using the simplified method. Use
If you share your home with someone to the gross income derived from quali- the Simplified Method Worksheet in
else who uses the home for a separate fied business use of the home reduced these instructions to figure your deduc-
business that qualifies for this deduction, by the business deductions that are not tion for a qualified business use of your
related to your use of the home. If this
each of you may make your own elec- home if you are electing to use the sim-
tion, but not for the same portion of the limitation reduces the amount of your plified method for that home.
deduction, you cannot carry over the dif-
home. ference to another tax year. Shared use (for simplified method
If you conduct more than one busi- only). If you share your home with
ness that qualifies for this deduction in Carryover of actual expenses from someone else who uses the home for a
your home, your election to use the sim- Form 8829. If you used Form 8829 in a separate business that also qualifies for
plified method applies to all your quali- prior year, and you had actual expenses this deduction, you may not include the
fied business uses of your home. You that you could carry over to the next same square feet to figure your deduc-
are limited to a maximum of 300 square year, you cannot claim those expenses if tion as the other person. You must allo-
feet for all of the businesses you conduct you are using the simplified method. In- cate the shared space between you and
in your home that qualify for this deduc- stead, the actual expenses from Form the other person in a reasonable manner.
tion. Allocate the actual square footage 8829 that were not allowed will be car- Example. Kristen and Lindsey are
used (up to the maximum 300 square ried over to the next year that you use roommates. Kristen uses 300 square feet
feet) among your qualified business uses

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