How to Fill Out IRS Form 8829: Line-by-Line Guide (2026)

If you are a self-employed professional, freelancer, or single-member LLC deducting actual home office expenses, the IRS requires you to attach Form 8829 (Expenses for Business Use of Your Home) to your Schedule C (Form 1040).

Form 8829 can look intimidating with its 43 lines, separate direct/indirect expense columns, and depreciation schedules. However, once broken into its 4 core parts, completing Form 8829 is straightforward. Here is the definitive line-by-line guide for 2026.

Part I: Part of Your Home Used for Business (Lines 1–7)

Part I establishes your Business Percentage. This percentage determines how much of your indirect housing costs (rent, electric, heat, insurance) can be written off.

Part II: Figure Your Allowable Deduction (Lines 8–27)

Part II applies your business percentage to your actual household operating expenses while enforcing the statutory gross income cap under IRC §280A(c)(5).

• Line 8 (Tentative Profit): Enter your Schedule C gross income minus all other business expenses (Schedule C Line 29). This is the legal ceiling on your allowable home office deduction for the year.
• Column (a) vs. Column (b):
  • Column (a) - Direct Expenses: Expenses that benefit only the office (e.g., painting the office walls). These are 100% deductible.
  • Column (b) - Indirect Expenses: Expenses that benefit the entire home (e.g., whole-home internet, central electricity, roof maintenance). Line 7's percentage is applied to this total.
• Line 19 (Rent): For renters, enter total annual rent paid in Column (b). Example: $24,000 rent × 11.11% = $2,666.40 allowable share.
• Line 20 (Utilities): Total electric, natural gas, trash, sewer, and water bills for the year.
• Line 21 (Other Expenses): Total home security monitoring, pest control, and homeowner association (HOA) operating fees.
• Line 27 (Allowable Operating Expenses): The sum of allowable direct expenses plus prorated indirect expenses.

Part III: Depreciation of Your Home (Lines 28–36)

Note: If you rent your residence, skip Part III entirely and proceed to Line 36.

For homeowners, Part III calculates straight-line depreciation for 39-year nonresidential real property:

1. Line 28 (Adjusted Basis or FMV): Enter the lower of: (1) your home's purchase price plus capital improvements, or (2) its fair market value on the date you first used it for business.
2. Line 29 (Land Value): Enter the value of the land. Land cannot be depreciated under IRS rules.
3. Line 30 (Basis of Building): Subtract Line 29 from Line 28.
4. Line 31 (Business Basis): Multiply Line 30 by your business percentage from Line 7.
5. Line 32 (Depreciation Percentage): Enter the IRS straight-line rate (usually 2.564% for full-year service; adjusted by mid-month convention for first-year service).
6. Line 33 (Depreciation Allowable): Multiply Line 31 by Line 32.

Part IV: Carryover of Unallowed Expenses (Lines 37–43)

If your Schedule C business had low revenues or a net loss before taking the home office deduction, IRC §280A prohibits the deduction from creating or increasing a net tax loss. Any unallowed portion is recorded on Line 43 and carries forward to next year's tax return indefinitely.

Transferring to Schedule C (Line 30)

Entering this total on Schedule C Line 30 reduces your net business profit on Line 31, which flows directly into both Schedule 1 (Form 1040) to lower your income tax and Schedule SE to reduce your 15.3% self-employment tax.

Frequently Asked Questions