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popvegas
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I am a Remote Federal Employee who built a home office outside my home for my full time position. Can I deduct any of the expenses used to build the office?

Office build on my property not inside my home.
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2 Replies

I am a Remote Federal Employee who built a home office outside my home for my full time position. Can I deduct any of the expenses used to build the office?

If you are an employee who receives a W-2 from your employer then employee business expenses are not deductible on a federal tax return due to the tax code changes in effect for tax years 2018 thru 2025.

I am a Remote Federal Employee who built a home office outside my home for my full time position. Can I deduct any of the expenses used to build the office?

The cost of the improvement is added to the cost basis of your home and may reduce your capital gains when you sell.  

 

I believe you can still list home office expenses in Turbotax, but there is no federal deduction.  The expenses may flow to your state tax return, if your state still allows that type of deduction.  

 

Under the rules from before 2018 (that might be reinstated for 2026 or might be in place for your state now): 

You can deduct your utilities and homeowners insurance on a pro-rated square foot basis.  The actual cost of building the improvement is an asset that you depreciate over 39 years. If you claim depreciation, you have to recapture that depreciation (pay tax on it) when you sell the home.  

 

Depreciating the improvement on your state return but not your federal return will create a bookkeeping nightmare when you sell your home, so I would leave the home office out of your tax return until the federal deduction is restored. 

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