I started working from home due to the pandemic. Can I deduct my home office expenses?
Unfortunately, the answer to that question is no. There is no tax deduction available for traditional employees (those who work for an employer as a full-time or part-time employee) to deduct the expenses related to their home office. The home office deduction you’re likely familiar with is only available to self-employed people.
Many companies have provided home office stipends or financial support of some capacity for their employees throughout the pandemic while mandating they work from home. If your company has not offered to cover any of your new home office expenses, our recommendation is to reach out to your HR department or direct boss to discuss the possibility of receiving assistance. It never hurts to ask!
While working from home is convenient and comes with various perks, the increased utility cost and the need to purchase equipment to work efficiently can be a strain on your bank account. We encourage you to start a conversation with your employer about how they could help offset some of those extra costs — especially if you won’t be returning to the office any time soon.
Can I deduct my home office supplies as unreimbursed employee expenses?
Tax reform in 2018 changed the home office deduction, including what traditional employees could deduct related to their work expenses.
Before the Tax Cuts and Jobs Act (TCJA) went into effect in 2018, you could deduct unreimbursed job expenses that exceeded 2 percent of your adjusted gross income (AGI) on your federal income tax return using Schedule A. Sadly, that’s not the case anymore.
If you work at home as an employee — even for your employer’s convenience — you can no longer deduct your out-of-pocket expenses. The new tax law did away with deductions for unreimbursed employee expenses.
If you’re self-employed, you can still claim the home office tax deduction for qualifying costs, whether you use the actual expenses or the simplified method. The deduction decreases your business income, and therefore, your gross income.
