The ongoing COVID-19 pandemic has kept countless people working from home for months now. Many have been wondering whether they should consider claiming the home office deduction on taxes next year, so we thought we’d pass along some information to help determine whether this may be an option for you.
If you have a specific question about your situation, please reach out and talk to me. As a Certified Financial Planner for over 20 years, I can share my experience and knowledge to give you options for your best financial plan.
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According to the attached resource from the IRS, your home must be your “principal place of business” for your trade or business to qualify to deduct expenses for the business use of your home. If you have another “fixed location where you conduct substantial administrative or management activities,” then you do not qualify for the home office deduction.
In other words, if you commuted to an office before March 2020, it’s unlikely you qualify for the home office deduction. If you principally worked from home before the pandemic, you may qualify for the home office deduction. The IRS provides a simple flow chart to help determine eligibility:
Also attached is an additional resource from the IRS to help clarify the home office deduction.
* * * We recommend consulting your tax professional if you are thinking of taking the home office deduction or want an opinion on your specific circumstances.
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Can You Deduct Your Work From Home Expenses on Taxes?
February 26, 2021