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yashK
Level 3

Furnitures home office taxable ?

I am a remote employee. My employer has allowed me to order furnitures upto 500$ for my working from home. They will reimburse upto 500$. I plan to order table, chair and monitor. Is this 500$ taxable ? Do I need to report it in my tax filing for year 2021

6 Replies
Critter-3
Level 15

Furnitures home office taxable ?

The reimbursement is NOT taxable to you  nor is it  DEDUCTIBLE on your tax return.    

Opus 17
Level 15

Furnitures home office taxable ?

If the company uses an accountable plan, the reimbursement is not taxable to you and is not reported on your tax return. An accountable plan means that the company only reimburses you for legitimate work expenses that you prove with receipts.

 

If the company uses a non-accountable plan, meaning that they simply give you an allowance and do not require that you prove you spent the money on legitimate business expenses, then they are required to include the income in your 1099 or W-2 wages, so the money would be taxable but there would be nothing extra for you to report.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
yashK
Level 3

Furnitures home office taxable ?

Got it. Lastly, I do not know if my company will ask me to return the furnitures back to them if i leave my current company. If i end up keeping the furnitures, is it still not taxable to me ?

yashK
Level 3

Furnitures home office taxable ?

Got it. In any of the case, i do not have to do anything from my side. If it is taxable, it is already added in my w2. Otherwise it is taxfree.

 Lastly, I do not know if my company will ask me to return the furnitures back to them if i leave my current company. If i end up keeping the furnitures, what you explained above is still applicable ?

Critter-3
Level 15

Furnitures home office taxable ?

Talk with the employer to see how they will handle this ...  technically they will be "selling" the furniture to you for a price so how they are going to "write off" the asset so if you buy it from them it is not taxable anymore than you buying it from Walmart. 

Opus 17
Level 15

Furnitures home office taxable ?


@yashK wrote:

Got it. In any of the case, i do not have to do anything from my side. If it is taxable, it is already added in my w2. Otherwise it is taxfree.

 Lastly, I do not know if my company will ask me to return the furnitures back to them if i leave my current company. If i end up keeping the furnitures, what you explained above is still applicable ?


Because the amount is under $500, the company probably does not have to follow any rules on disposal.  If they allow you to keep the furniture, I do not believe it would normally have to be considered taxable income at that time (like a severance "bonus").  However, they do own the items and would be entitled to ask you to return them.  It's up to them.

 

(If you were keeping an expensive listed asset that was not fully depreciated, that might be considered income, at the fair market value at the time of separation.  But the dollar amount here is too small for these to be listed assets, in most cases.)

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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