MIAMI (CBSMiami) – You may be able to write off the cost of your home office come tax time.
COVID-19 and ‘The Great Resignation’ sent lots of folks home who started working from home and it became the norm for a significant portion of the American workforce.
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The question for this tax season is if working from home can be deducted as keeping a home office on your income tax return. The answer, in a word, is, it depends.
Registered Tax Agent Gus Rodriquez told CBS4, “The W-2 employee lost the home office deduction and lost reimbursement on employer expense.”
According to the Folks at Miami’s Tax House that’s important to know even if your employer sent everyone home due to COVID, the employer should but often does not provide a computer and other necessary services and items to set up a home office.
In 2018, the IRS determined employers should be responsible for employees’ expenses working at home.
What if you are not a “W-2 employee? You are a freelancer, taking gig jobs, involved in the shared economy based out of your home?
“Keep in mind if you receive income from the sharing economy activity, it is taxable on the other hand, some of your business expenses may be deductible,” said an IRS spokesman.
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A deduction is in order if: You use your home office to conduct business, like in-person meetings with patients, clients, or customers and the home office can include a studio, garage, or barn, used for business.
Deductions are based on the percentage of your home, square footage, devoted to business use.
But itemizing deductions for a home office can get complicated with lots of paperwork and record-keeping.
“That’s why people who go for the Safe Harbor, Safe Harbor you put in square feet of you home and they will give you an automatic deduction up to 15 hundred dollars, no need to multiply, subtract, figure out how much of this, how much of that it is the easy way to go,” Rodriquez said.
So to recap, there is no home office deduction, if you are a full-time W-2 employee.
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Rodriguez said, “As long as you substantiate your need to spend that money to make that money then deduct it.”
