No; not unless you’re self-employed.
Thinking about getting a tax deduction for the period you worked from home during the pandemic? Some managed to make a few more savings than usual — especially if they previously commuted to their office or ate out. On the other hand, some things became more expensive as many had to stock up on office supplies to turn their home office into a functioning office. Or they may have had to finally upgrade their internet connection to attend meetings and be as responsive as possible. To add insult to injury, being stuck at home means using more energy than usual. Water and power bills have risen considerably (collectively).
Are you eligible for home office deductions?
The home office deduction lets you write off office expenses incurred using your home as a place of business. However, there’s a few caveats:
1) All employees are not automatically eligible
Before 2018, it was possible to deduct 2% of your office or business expenses. However, you had to itemize the list to calculate the tax deductible amount. However, this policy was terminated in 2017 by the Tax Reform Law.
2) It applies if you’re a contractor or self-employed
If you’ve spent most of the pandemic running your own business, you’re in luck. Your needs are catered for in Schedule C (Form 1040). This section does not care if you were working from home or not. You can write off supplies, postage, tech gadgets, printers, and all the other essentials you need for your home office.
There’s no better time to start your own business. Our CPAs can work with you to determine what classification is best for your business.
Photo by Roberto Nickson