Tax Deductions for Employees Who Work From Home

accounting firm NJThe pandemic has caused a seismic shift in the way we work, with more and more people transitioning to working from home. Whether you’re an employee of a company, self-employed, or work as a 1099 freelancer, there are tax write-offs you can claim that will help you save on your taxes.

In this article, we’ll explore the different types of work-from-home deductions you can claim on your taxes. 

We’ll look at the types of deductions available, how to claim them, and the benefits of doing so. So grab your W-2s, 1099s and your calculator — let’s get ready to maximize your tax savings!

Are There Tax Write-offs For Working From Home?

Yes, the IRS provides tax write-offs for self-employed individuals and employees that work from home.

To be eligible, you must meet specific criteria, such as regularly and exclusively using part of your home for business purposes and having a qualified home office.

The IRS also allows deductions for home-related expenses such as internet, utilities, office supplies, and phone costs. You can also deduct a portion of your rent or mortgage if you use part of your home solely for business purposes.

Following the 2018 tax reform, tax write-offs for working from home are now mainly available to self-employed individuals. But, you can still qualify for the deduction as an employer if you also work for yourself as a freelancer or contractor. 

In that case, you can deduct the expenses associated with the income from your business rather than your paid job. 

Can I Write Off My Home Office if I Work For a Company?

You may be eligible to write off some of your home office expenses if you have a qualified home office you use for work purposes.

However, the IRS has made it clear that the deduction is only available to those who are self-employed or have multiple sources of income.

If you work for a company, you cannot claim the deduction on any expenses associated with their income unless you also have a side business.

How to Claim Work-From-Home Deduction on Your Taxes

If you qualify for the home office tax deduction, you can claim it on your taxes through either the simplified or the direct method.

The simplified method allows you to deduct $5 per square foot of your home office up to a maximum of 300 square feet. This means you can deduct a maximum of $1,500 using the simplified method.

The direct method, on the other hand, requires you to calculate the actual expenses associated with your home office, such as rent, utilities, phone and internet bills. You can then deduct the percentage of these expenses associated with running your business.

Regardless of your chosen method, you must keep detailed records of all the expenses associated with your home office, such as receipts and invoices.

Contact Our Accounting Firm in NJ

Work-from-home tax deductions can be confusing and complicated. That’s why it’s important to get help from an experienced accounting firm.

At Cg, we understand the complexities of tax law and work hard to ensure that you get the most out of your deductions. We can provide guidance on the best way to claim your home office tax deductions and help you increase your tax savings.

Don’t wait until it’s too late — contact Cg Team to learn more about claiming work-from-home deductions on your 2022 taxes. Our team of dedicated experts is here to help people who work out of their own homes make the most out of tax season. Get in touch today!

Cg is a Premier Accounting Firm in NJ

Cg is a top accounting firm in NJ, with locations in Tinton Falls and Toms River.  Our certified public accountants provide accounting and tax services across the NJ, NY and CT area. The philosophy here at Cg is simple: Gather the best and brightest accomplished financial consultants from several industries. Develop a deep understanding of the client’s needs, operations, business strengths and weaknesses. Provide accurate assessments and evidence-based strategies to offer the most advantageous options for them. 

Accounting firms are not all created equal. You need an accredited team with specialized industry expertise and the financial acuity to ensure your success. That’s exactly what Cg provides to every one of our clients. We are backed by four decades of experience and take a practical, results-oriented approach with a focus on increasing profitability.

We provide business accounting services in NJ, NY and CT. Cg specializes in valuations, business audits, forensic accounting, financial consulting and more across a wide range of industries. 

 Give us a call at 732-676-4100.