Are You Missing Home Office Deductions?
Do you have a Home Office?
You could be missing out on Home Office Deductions that could save you hundreds or thousands. Whether you started their own business, do some freelance work on the side, work remotely for an employer, or were sent home for a few months because of the coronavirus. You may be able to take a tax break for your home office expenses, but you need to follow some strict rules. There's a lot of confusion around the home office deduction because many remote workers who took the break in the past are no longer eligible – the Tax Cuts and Jobs Act eliminated the home office deduction for employees who work from home for an employer. But self-employed people can still take the break if their home office qualifies.
To qualify for the home office deduction, you must use part of your home "regularly and exclusively" for business. Your office doesn't need to be in a separate room, but it has to be in an area of your home where you don't do anything else. It can be a dedicated nook in the corner of your basement, for example, but it can't be the kitchen table where your family also eats.
If you're working at home for just a few months – which so many people are doing now because of the coronavirus – you may be able to take a partial-year home office deduction when you file that year's income tax return but, you must be self-employed, the home office must be used regularly, and exclusively for business during those months. Keep this requirement in mind if you're setting up a temporary office in your home: It doesn't have to be a separate room, but it has to be a space you use exclusively for your business.
If you have any questions about home office deductions, talk to us today. We're here to help!