! employees, such — Instruction 1040 (Schedule C)

CAUTION as wages the amount applicable to depreciation and

other expenses claimed elsewhere.

In most cases, you are required to file Form W-2 for each employee. See the General Instructions for Forms W-2 and W-3.

Line 27a

Energy efficient commercial buildings deduction. You may be able to deduct part or all of the expenses of modifying an existing commercial building to make it energy efficient. For details, see Form 7205 and its instructions. Attach Form 7205 to your tax return.

Line 30

Business use of your home. You may be able to deduct certain expenses for business use of your home, subject to limitations. To claim a deduction for business use of your home, use Form 8829, or you can elect to determine the amount of the deduction using a simplified method.

If you have a business use of another home, you can’t use the simplified method for that home. You can use the Form 8829 to claim expenses for business use of the other home.

For additional information about claiming this deduction, see Pub. 587 .

If you are not using the simplified method to determine

TIP the amount of expenses you may deduct for business

use of a home, do not complete the additional entry spaces on line 30 for total square footage of your home and of the part of the home used for business. Instead, include the amount from line 36 of your Form 8829 on line 30.

Simplified method. The simplified method is an alternative to the calculation, allocation, and substantiation of actual expenses. In most cases, you’ll figure your deduction by multiplying the area (measured in square feet) used regularly and exclusively for business, regularly for daycare, or regularly for storage of inventory or product samples, by $5. The area you use to figure your deduction cannot exceed 300 square feet. You can’t use the simplified method to figure a deduction for rental use of your home.

Electing to use the simplified method. You choose whether or not to use the simplified method each tax year. Make the election by using the simplified method to figure the deduction for the qualified business use of a home on a timely filed, original federal income tax return for that year. An election for a year, once made, is irrevocable. A change from using the simplified method in one year to actual expenses in a succeeding year, or vice versa, is not a change in method of accounting and does not require the consent of the Commissioner.

If you share your home with someone else who uses the home for a separate business that qualifies for this deduction, each of you may make your own election but not for the same portion of the home.

If you conduct more than one business that qualifies for this deduction in your home, your election to use the simplified method applies to all your qualified business uses of your home. You are limited to a maximum of 300 square feet for all of the businesses you conduct in your home that qualify for this deduction. Allocate the actual square footage used (up to the maximum 300 square feet) among your qualified business uses in any reasonable manner you choose, but you may not allocate more square feet to a qualified business use than you actually use in that business.

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 th~~ is 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 footag e.

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.

Simplified Method Worksheet Keep for Your Records

Enter the amount of the gross income limitation. See the Instructions for the Simplified Method Worksheet above . . . . . . . . . . 1.
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

Multiply line 2 by line 3c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
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.
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.

Daycare Facility Worksheet (for simplified method)

Multiply days used for daycare during the year by hours used per day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
Total hours available for use during the year. See the Instructions for the Daycare Facility Worksheet . . . . . . . . . . . 2.
Divide line 1 by line 2. Enter the result as a decimal amount here and on line 3b of the Simplified Method Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.

If you used your home for more than one business, you