Simplified Method Worksheet

1. Enter the amount of the gross income limitation. See the Instructions for the Simplified Method Worksheet above 1. _____ 2. Allowable square footage for the qualified business use. Don’t enter more than 300 square feet. See the Instructions for the Simplified Method Worksheet above 2. _____ 3. Simplified method amount a. Maximum allowable amount 3a. $5 b. For daycare facilities not used exclusively for business, see the instructions for line 3b of this worksheet above, and enter the decimal amount from the Daycare Facility Worksheet; otherwise, enter 1.0 3b. _____ c. Multiply line 3a by line 3b and enter the result to two decimal places 3c. _____ 4. Multiply line 2 by line 3c 4. _____ 5. Allowable expenses using the simplified method. Enter the smaller of line 1 or line 4 here and include that amount on Schedule C, line 30. If zero or less, enter -0- 5. _____ 6. Carryover of unallowed expenses from a prior year that are not allowed in 2025. Form 1040-SS filers, see the instructions above before completing. a. Operating expenses. Enter the amount from your last Form 8829, line 43 (line 42 if before 2018). See the instructions for line 6a above 6a. _____ b. Excess casualty losses and depreciation. Enter the amount from your last Form 8829, line 44 (line 43 if before 2018). See the instructions for line 6b above 6b. _____

Instructions for the Daycare Facility Worksheet Use this worksheet to figure the percentage to use on line 3b of the Simplified Method Worksheet. If you don’t use the area of your home exclusively for daycare, you must reduce the prescribed rate before figuring your deduction using the simplified method. If you used at least 300 square feet for daycare regularly and exclusively during the year, then you don’t need to complete this worksheet. This worksheet is only needed if you did not use the allowable area exclusively for daycare. Line 1. Enter the total number of hours the facility was used for daycare during the year. Example. Your home is used Monday through Friday for 12 hours per day for 250 days during the year. It’s also used on 50 Saturdays for 8 hours a day. Enter 3,400 hours on line 4 (3,000 hours for weekdays plus 400 hours for Saturdays). Line 2. If you used your home for daycare during the entire year, multiply 365 days (366 for a leap year) by 24 hours, and enter the result. If you started or stopped using your home for daycare during the year, you must prorate the number of hours based on the number of days the home was available for daycare. Multiply 24 hours by the number of days available and enter the result.