Ask the COMMUNITY expert Taxes NEWS
CAN YOU DEDUCT WORK-FROM-HOME EXPENSES?
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cross the nation, remote work has boomed during the pandemic. And as the workplace gradually returns to “business as usual,” more employers than ever are opting to make a permanent switch to hybrid or full-remote work. With work-from-home emerging as the new normal, it’s only natural for taxpayers to weigh the tax implications of home offices. We hope to illuminate the world of work-from-home deductions, who is eligible to claim them, and how they can be calculated. Who Is Eligible for the Home Office Deduction? Before 2018, most W2 employees could claim certain home office tax deductions. However, since the 2018 tax year, the rules have tightened significantly. As a result, home office tax deductions are no longer available to W2 employees. However, self-employed individuals who conduct their business at home are still eligible for the home office deduction, with a few exceptions. What Does an Eligible Home Office Look Like? A qualifying home office may consist of space within an apartment, condo, or home, whether owned outright
or rented by the taxpayer. Freestanding structures such as outfitted sheds, barns, and detached studios are also eligible. However, temporary lodging such as a hotel or motel rooms does not qualify. To qualify as a deductible home office, the space in question has to meet several criteria, the first being the “regular and exclusive use” requirement. To meet this requirement, you must use the space exclusively for conducting business. If you conduct your business in your kitchen, you probably won’t be able to claim the home office deduction. Of course, like most things tax, there are exceptions to the rule. For example, if you use your home office to store business inventory or you are a licensed care provider for children, the disabled, or seniors (defined as 65 years of age or older), the regular and exclusive use requirement loosens. In addition, your home office must be your “principal place of business,” meaning that the bulk of your administrative duties takes place within that space. If you conduct most of these duties away from home and only utilize your home office as a secondary workspace,
Ryan Dodson has a Masters in Accounting from North Carolina State University. He worked in public accounting with Deloitte and Arthur Andersen. He and his wife Tiffany own and operate Liberty Tax Service. 405 East Dixie Drive•Asheboro, NC 27203 (336) 629-4700 12 | asheboromagazine.com
