Who Qualifies for the Home Office Deduction?

Scan Alert Image.jpg  

Vantage Financial welcomes guest contributions. Please know the information, opinions, and forecasts expressed in the article below are presented from unassociated parties and do not necessarily reflect the opinions of Vantage Financial Partners Limited. This article is shared as general information only and should not be considered advice.​​

By Bob Veres with Insider Information

Many people are doing their jobs from home on a sustained basis for the first time in their careers.  They have had to set up a home office.  Does that mean they can claim a home office deduction, even though they still have a workstation, cubicle or office at their place of work?

The bad news is that the Tax Cut & Jobs Act of 2017 severely curbed what had been a valuable home office deduction for staff people who had to do some of their work at home.  Previously, people could deduct unreimbursed job expenses that exceeded two percent of their adjusted gross income on their income tax return.  Since 2018, employees working at home can no longer deduct their out-of-pocket expenses.  Only gig workers and self-employed free-lancers could still claim the deduction for qualifying costs—the rental or mortgage cost of the part of their home that was used as a home office, plus maintenance, insurance, utilities, a proportionate share of property taxes and security system fees.

The bottom line is that you need to have self-employment income to benefit from the home office deduction.  If you find yourself temporarily furloughed and start taking on assignments on the side, then you can claim the deduction if your home is your principal place of business, and if you have set aside a “separately identifiable space” in the home (not, say, the kitchen table).  During this pandemic, every penny—and tax savings—counts.

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual. Where applicable, all data and information has been gathered from sources believed to be accurate such as the internet, non-affiliated 3rd parties, news articles and professional subscriptions but this information is not warranted to be correct, complete or true. 

 

Securities and Advisory services offered through LPL Financial. A registered investment advisor. Member FINRA & SIPC.

The LPL Financial representative associated with this website may discuss and/or transact securities business only with residents of the following states: IL

Website Design For Financial Services Professionals | Copyright 2020 AdvisorWebsites.com. All rights reserved