Although working from home has long been an option that many have chosen, the last year has made it possible to get a ton of jobs to work remotely. If you haven’t gone back to the office yet, or you have decided to work from home permanently, can you deduct the expenses?
Whether you lost your job because of the Covid-19 pandemic and want to work from home, or you like the freedom that working remotely and on your own terms brings, you may be wondering what tx implications this has and whether you can deduct the expenses. What has the IRS said about this?
Normal life seems to be closer due to the massive vaccination campaign that is being carried out, but perhaps, these months have made you see that working from home is something you want to adopt permanently. If this is your case, or if you want to generate money while the perfect job appears, read on to learn how this can affect your taxes.
According to the IRS website, to deduct expenses related to the part of your home used for business, you must meet specific requirements, but, even then, your deduction may be limited.
To be able to deduct expenses, you must use part of your home:
• Exclusively and regularly as your principal place of business,
• Exclusively and regularly as a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business,
• In the case of a separate structure that isn't attached to your home, exclusively and regularly in connection with your trade or business,
• On a regular basis for storage of inventory or product samples for use in your trade or business of selling products if your home is the only fixed location of the trade or business,
• For rental use, or
• As a daycare facility.
The agency has clarified that you don't have to meet the exclusive use test if you satisfy the rules that apply to storage, rental, or daycare use.
For more information about deductions and the possibility of a safe harbor option, visit the FAQ of the IRS website.