Instructions for the Simplified Method Worksheet

Use this worksheet to figure the amount of expenses you may deduct for a qualified business use of a home if you are electing to use the simplified method for that home. If you are not electing to use the simplified method, use Form 8829. Line 1. If all gross income from your trade or business is from this qualified business use of your home, figure your gross income limitation as follows. A. Enter the amount from Schedule C, line 29 _____ B. Enter any gain derived from the business use of your home and shown on Form 8949 (and included on Schedule D) or Form 4797 _____ C. Add lines A and B _____ D. Enter the total amount of any losses (as a positive number) shown on Form 8949 (and included on Schedule D) or Form 4797 that are allocable to the business, but not allocable to the business use of the home _____ E. Gross income limitation. Subtract line D from line C. Enter the result here and on line 1 of the simplified method worksheet _____ If some of the income is from a place of business other than your home, you must first determine the part of your gross income (Schedule C, line 7, and gains from Form 8949, Schedule D and Form 4797) from the business use of your home. In making this determination, consider the amount of time you spent at each location as well as other facts. After determining the part of your gross income from the business use of your home, subtract from that amount the total expenses shown on Schedule C, line 28, plus any losses shown on Form 8949 (and included on Schedule D) or Form 4797 that are allocable to the business in which you use your home but that are not allocable to the business use of the home. Enter the result on line 1 of the simplified method worksheet. Note: If you had more than one home in which you conducted this business during the year, include only the income earned and the deductions attributable to that income during the period you owned the home for which you elected to use the simplified method. Line 2. If you used the same area for the entire year, enter the smaller of the square feet you actually used or 300. If you and your spouse conducted the business as a qualified joint venture, split the square feet between you and your spouse in the same manner you split your other tax attributes. If you shared space with someone else, used the home for business for only part of the year, or the area you used changed during the year, see Figuring your allowable expenses for business use of the home , before entering an amount on this line. Do not enter more than 300 square feet or, if applicable, the average monthly allowable square footage on this line. See Part-year use or area changes (for simplified method only) , later, for more information on how to figure your average monthly allowable square footage. Line 3b. If your qualified business use is providing daycare, you may need to account for the time that you used the same part of your home for other purposes. If you used the part of your home exclusively and regularly for providing daycare, enter 1.0 on line 3b. If you did not use the part of your home exclusively for providing daycare, complete the Daycare Facility Worksheet to figure what number to enter on line 3b. Line 6. Because you are using the simplified method this year, you cannot deduct the amounts you entered on lines 6a and 6b this year. If you file Form 8829 in a later year for your qualified business use of this home, you will be able to include these expenses when you figure your deduction. 6a. If you didn’t file a 2024 Form 8829, your carryover of prior-year operating expenses is the amount of operating expenses shown in Part IV of the last Form 8829, if any, that you filed to claim a deduction for business use of the home. If you filed Form 1040-SS in a prior year and used a worksheet in Pub. 587 to figure your carryover of unallowed expenses, your carryover of prior-year operating expenses is the amount of operating expenses shown on your last worksheet from Pub. 587, if any, that you used to claim a deduction for business use of the home. This will be the amount from line 6a of the Simplified Method Worksheet or line 41 of the Worksheet To Figure the Deduction for Business Use of Your Home in Pub. 587. 6b. If you didn’t file a 2024 Form 8829, your carryover of prior-year excess casualty losses and depreciation is the amount of excess casualty losses and depreciation shown in Part IV of the last Form 8829, if any, that you filed to claim a deduction for business use of the home. If you filed Form 1040-SS in a prior year and used a worksheet in Pub. 587 to figure your carryover of unallowed expenses, your carryover of prior-year excess casualty losses and depreciation is the amount of excess casualty losses and depreciation shown on your last worksheet from Pub. 587, if any, that you used to claim a deduction for business use of the home. This will be the amount from line 6b of the Simplified Method Worksheet or line 42 of the Worksheet To Figure the Deduction for Business Use of Your Home in Pub. 587.