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hodged1
New Member

I have used TurboTax for my own taxes. I been told to work from home permanently for my job. What do I need to know to be ready for claiming my home office on my taxes?

 
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I have used TurboTax for my own taxes. I been told to work from home permanently for my job. What do I need to know to be ready for claiming my home office on my taxes?

If you are a W-2 employee, home office expenses were eliminated as a deduction on your tax return effective with tax year 2018. If you are self employed and receive a 1099-MISC, you can still deduct home office expenses. 

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I have used TurboTax for my own taxes. I been told to work from home permanently for my job. What do I need to know to be ready for claiming my home office on my taxes?

If you are a W-2 employee, home office expenses were eliminated as a deduction on your tax return effective with tax year 2018. If you are self employed and receive a 1099-MISC, you can still deduct home office expenses. 

Carl
Level 15

I have used TurboTax for my own taxes. I been told to work from home permanently for my job. What do I need to know to be ready for claiming my home office on my taxes?

Not just home office expenses. Any and all expenses related to your W-2 job are flat out no longer deductible. Not a penny.

 

I have used TurboTax for my own taxes. I been told to work from home permanently for my job. What do I need to know to be ready for claiming my home office on my taxes?

You can still list work related deductions in TurboTax, and they may flow through to your state tax return if you itemize deductions on your state tax return. Some states have retained the old rules.

 

In that case, a home office must be your regular place of business and it must be used exclusively for work. Regular means that is it is your regular place of work, you have no other office where you could go and you do all or most of your work at home. Exclusive means that the area of your home that you set aside as a home office is not used for personal use in anyway. It does not necessarily have to be a spare room, but it must be an area of the house that is not used for personal use. Working on the kitchen table does not convert your kitchen into a home office.  You must also work at home for the convenience of or at the instruction of your employer, not nearly for your own convenience.

 

then, you would deduct a portion of your mortgage interest, utilities, homeowners insurance, and other expenses based on the percentage of square footage used for the home office.  You can also deduct depreciation, which is wear and tear on your property. However, this will create a tax situation when you sell the home. You must repay any depreciation that you previously claimed or could have claimed while using the home office deduction and pay taxes on it, even if you are otherwise qualified to exclude the capital gains on the sale of your home.

 

Because this is possibly a state deduction but not a federal deduction, it’s probably not worth the paperwork to claim it.

 

Your employer may be willing to reimburse direct out-of-pocket costs, such as equipment and supplies that you must purchase.  You could certainly renegotiate your employment agreement if you are now expected to permanently work from home and provide supplies and services to yourself that were previously supplied by your employer.

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