WASHINGTON, D.C., USA — As the coronavirus pandemic forced offices across the country to shut down, it changed the way many people work. An at-home office has become the norm for millions of people and many have spent their own money or created a new space to make it work.
Unfortunately, we have some bad news for employees hoping to write off the work at home expenses: you likely won’t be able to.
“A few years ago, all of us would have been able to deduct these work-from-home expenses that we've incurred,” said Nathan Rigney, Tax Analyst for H&R Block. “But under the law that passed in late 2018, those unreimbursed employee business expenses, including home office expenses, are no longer allowed.”
The law that Rigney referenced is the Tax Cuts and Jobs Act, which did away with many miscellaneous itemized deductions including the unreimbursed employee expense.
The bottom line, if you are an employee, you can’t write off any work at home expenses on your 2020 taxes.
However, if you are self-employed or an independent contractor and working from home, you may be able to write off your expenses. Rigney said in this case the self-employed is considered a small business owner and can deduct work at home costs as business expenses.
“So, if you're an independent contractor or self-employed individual, make sure that you're documenting those expenses,” Rigney advised. “You can even deduct a portion of indirect expenses, like your mortgage interest, or your rent, or utilities, so just make sure you're tracking those expenses.”
Rigney added that it’s a good idea for everyone to track work at home expenses because some may be deductible at the state level, or it’s possible that lawmakers introduce legislation that brings back the work at home tax deduction.
If you have a question for the Dollars and Sense team text us at 916-321-3310.