Home Office Deduction for Consultant with W-2 wages

[JMuldoon]

My wife is a consultant and works 100% of the time in a home office.  Her wages are reported on a W-2 from her consulting agency.  Turbotax appears to be limiting her home office deduction because it doesn't recognize her W-2 wages as business income.  Is there any way to get around this?

- Joe

[AlanT222]

Unfortunately, she cannot deduct home office expenses as an employee.  Employees working from home can no longer take the home office deduction as of 2018 due to the Tax Cuts and Jobs Act that was signed into law in December of 2017. Prior to that, employees who worked from home at the convenience of their employer were allowed to deduct home office expenses under the 2% rule.

But if you're self-employed, housing-related expenses such as mortgage interest, rent, utilities, repairs, and depreciation for the portion of your home or rental that you use to run your business are allowable expenses under the home office deduction.

[Carl]

All W-2 work related expenses are no longer deductible. However, if the "statutory employee" box is checked on that W-2, that makes in self-employment income that gets reported on SCH C. A home office can be claimed for self-employment income. So if that box is checked on the W-2, make sure you check that same box in the program when you enter the W-2.