You’re working from home now. You qualify for a home-office tax deduction, right? Not so fast
Millions of Americans are working at home during the coronavirus pandemic. You’ve created a nice backdrop of books, awards and knickknacks to impress your colleagues during Zoom conferences. You’re also paying for the utilities and internet service you need to do your job for your employer.
A lot of readers have asked: We must qualify for a home office tax deduction, right?
Don’t get your hopes up about that tax break, said Arthur Zatz, a tax attorney in Isdaner and Co., a Bala Cynwyd accounting firm in The City Ave District.
Self-employed people can write off some home office expenses — many freelancers were already taking a home-office deduction before the coronavirus. But the Tax Act of 2017 eliminated a lot of individual tax breaks, including the home-office deduction for employees, Zatz said.
But there’s a glimmer of hope for employees.
More on that later.
The 2017 Tax Cut Act dramatically increased the standard deduction to $12,000 for individual taxpayers ($24,000 for joint-filers). But it eliminated a lot of deductions, including unreimbursed employee work expenses. The aim was to simplify tax preparation: About 46 million taxpayers itemized deductions in 2017. Fewer than 17 million itemized in 2018. About 90% of all taxpayers now claim the standard deduction.
If you’re an employee, the home office deduction is no longer an option.
Many self-employed workers already deduct costs for home offices. Some self-employed people who work in offices that are shut down because of the coronavirus lockdown may want to explore deducting costs of working at home, tax professionals say.