Working from Home and the Home Office Tax Deduction: What To Know

The past 12 months have been difficult for just about everyone. This includes individuals, families, and small businesses. One of the major shifts that we have seen is more people working from home. This includes people who used to work in an office but have been forced to work from home due to the pandemic. This also includes people who are looking for jobs they can watch him home, including opportunities such as:

  • Getting paid to watch movies
  • Taking online surveys for cash
  • Becoming an online tutor
  • Reviewing products or software
  • Becoming a freelancer in your area of expertise (marketing, writing, transcription, etc.)

If you are working from home, you probably have a home office. Is this something that you should claim on your tax deduction? What do you need to keep in mind? You could always speak with a tax professional before you claim the home office tax deduction. That way, you understand exactly what rules you need to follow.

If You Are Still Employed By a W-2 Employer

First, if you are still employed and taxed as part of a W-2 job, you are not likely to be able to claim a home office deduction. This includes other deductions for expenses as well. In 2017, a bill was passed that eliminated these deductions. On the other hand, you may be able to request reimbursement from your employer. This could include electricity, internet expenses, and other equipment that you need to do your job. If you are wondering how you can get reimbursed by your employer, you should reach out to your employer and ask.

If You Are Self-Employed

On the other hand, if you are self-employed, all expenses related to your business should be tax-deductible. There are a lot of deductions that you can claim. For example, you can start with your electricity and internet service. On the other hand, you might also be able to claim the square footage of your office space. If your office space is not a separate room in your home, you can still claim some deductions. For example, even if your desk assembly in the corner of your bedroom, you may be able to climb the square footage around the desk as part of your tax deduction. Even if your office is in an RV, you may be able to claim a portion of your RV as a tax deduction. Of course, there are rules surrounding what you can claim and what you cannot claim. Therefore, you should reach out to a tax professional for a system.

Measure the Square Footage Carefully

If you are planning on buying a home office tax deduction, you need to measure the square footage of your office carefully. If you are ever in doubt, you can pretend like you are having to justify this to the IRS. In the event you are audited, you will need to justify the square footage you are claiming. In fact, it might be a good idea to reach for a tape measure. Do not leave any room for doubt.

Do Not Hesitate To Reach Out to a Pro

Finally, if you ever have any questions or concerns about what you should or should not claim on your tax return, you should reach out to a professional accountant for assistance. You want to make sure that you get as much money back as possible. On the other hand, you also do not want to claim a deduction that you should not be claiming. Otherwise, you will simply open yourself up to an audit from the IRS. It would not be worth the stress of going through an IRS audit just to claim a few extra dollars on your tax return.