“Working from Home? Find Out if You Qualify for Tax Deductions”

– Working from home can lead to extra costs, such as buying new furniture and office equipment, higher utility bills, and additional office supplies.
– Unfortunately, W-2 employees may not be eligible for many tax breaks for their work-from-home expenses due to changes in tax laws.
– The Tax Cuts and Jobs Act of 2017 eliminated the ability for W-2 employees to deduct non-reimbursed work expenses and claim a home office deduction. – If individuals have to pay for childcare to focus on their work, they may be eligible for the Child and Dependent Care Tax Credit, which can provide up to $3,000 in tax savings for one child and up to $6,000 for two or more children.
– Employees may ask their employer for reimbursement for home office expenses, but they cannot claim these deductions on their taxes.
– Self-employed individuals, such as freelancers and business owners, can deduct expenses like furniture, equipment, office supplies, and utilities against their business income.
– To qualify for a home office deduction, the home office must be the principal place of business.
– Maintaining a home office only for business use is important in order to qualify for the deduction.
– It’s important to keep track of expenses and receipts throughout the year for potential deductions. – Tax specialists can provide additional information and updates on changes in tax laws related to COVID-19.
– Congress may add new deductions to help employees working from home in addition to the ones already passed.
– It’s a good idea to consult a tax specialist to find out what tax breaks exist to offset the costs of working from home and to determine eligibility for these deductions.

https://www.firstcitizens.com/personal/insights/taxes/work-from-home-tax-deductions