Call Center Startup

[cathedral12]

I started working from home as a call center rep.  What deductions can I take on my return?

[DaveF1006 · Accepted solution]

If you are a W2 employee, employee business expenses are no longer deductible on the federal return.  You may be able to deduct the expenses on your state return if you live in the states of Alabama, Arkansas, California, Hawaii, Minnesota, New York and Pennsylvania. If you live in these states, here is how to report.

1. Go to federal>deductions and credits
2. Employment Expenses
3. Job Expenses for W-2 Income

Once you are here, you can navigate through the screens and claim expenses like home office expense, telephone and internet expense, computer, licensing fees if these exist and other expenses  Once done, these will not show up as itemized expenses on your federal return but will appear on your state return, if you itemize expenses for the year versus taking the standard deduction.

If you are an independent contractor that is responsible for paying your own taxes, you may claim certain deductible expenses against your income both on the federal and state level. Please read this wonderful Turbo Tax article that explains the expenses that you can deduct against your self-employed income. Here is how to enter.

1. Open or continue your return.
2. Select Search, enter schedule c and select the Jump to schedule c.
   • Or go to Wages & Income and select Start or Revisit next to Self-employment income and expenses under Self-Employment.
3. Answer Yes to Did you have any self-employment income or expenses?
   • If you've already entered self-employment work and need to enter more, select Add another line of work.
4. Follow the on-screen instructions to enter your Schedule C.

Here are the self-employed expenses you can deduct and where to enter them.

[xmasbaby0]

Did you receive a W-2 or a 1099NEC for your income?   If you are a W-2 employee there are no federal deductions to enter.    If you are self-employed you can enter business expenses on a Schedule C.

[DawnC]

You can take deductions only if you are self-employed.   Under the Tax Cuts and Jobs Act (TCJA) that Congress signed into law on December 22, 2017, the unreimbursed employee expenses deduction has been suspended in tax years 2018 through 2025.   There are some exceptions where you can still use Form 2106 through tax year 2025, including if you were an Armed Forces reservist, qualified performing artist, fee-basis state or local government official, or an employee with impairment-related work expenses.

 Job-related expenses might be deductible in your state, even if they’re not deductible on your federal return.   You can enter your expenses using these instructions, and we’ll figure out if you can deduct them.

If you’re self-employed or own a business, enter your business-related expenses on Schedule C instead.  If you are self-employed, there is a link describing what deductions you can take, at the bottom.  

[cathedral12]

I received a 1099NEC so I assume that is a self employed notice but I also receive social security payments Do i need to set up a business account or just file with startup cost deducted

[DaveF1006]

Yes, you will report the 1099 NEC as  self-employed income and report the Social Security income in another section of your return. First the self-employment.

1. Open or continue your return.
2. Select Search, enter schedule c and select the Jump to schedule c.
   • Or go to Wages & Income and select Start or Revisit next to Self-employment income and expenses under Self-Employment.
3. Answer Yes to Did you have any self-employment income or expenses?
   • If you've already entered self-employment work and need to enter more, select Add another line of work.
4. Follow the on-screen instructions to enter your Schedule C.

Here are the self-employed expenses you can deduct and where to enter them.

To report the social security income. 

• In the Federal section, select Wages & Income.
• Scroll to locate Retirement Plans and Social Security.
• Select Start or Revisit next to IRA, 401(k), Pension Plan Withdrawals (1099-R) Or Social Security ( SSA 1099, RRB 1099)
• Select Social Security ( SSA 1099, RRB 1099) to report your Social Security Income

@cathedral12