home office expenses

[taxesx4]

I'm trying to figure out what I should claim as part of my home office expenses.  My company closed the campus and told us to work from home on March 11 of 2020.   I own my home with my spouse and don't rent it out.  I have put in the sq footage of both my office and whole home. Here are my questions:  Thanks in advance. 

1. Should I claim that 83% of my total income was earned from my home office (10 mos)

2. Should I enter my mortgage interest for the whole home?

3. If I enter my property taxes in this home office expense section, do I need to adjust them in a different section?  I had entered them previously under prop taxes.

4. Can I claim my whole cell phone bill?  This is the only phone I have available for work (and I use it daily for work), but I also use it for personal use.

5. Should I enter my electric bill and water bill for the whole home?

Thanks again.

[DawnC]

Are you a W-2 employee or are you self-employed?    Most W-2 employees won’t be able to deduct home office expenses on their federal return, even if they’ve been asked to work from home due to COVID-19.    But, some states do allow W-2 employees to deduct these types of expenses on their state returns.   We’ll check for every possible deduction and any state-specific tax breaks to get you your best tax outcome.   If you are a W-2 employee, provide your state and we can tell you if your state has a deduction before you put the effort into claiming the home office deduction.   

• Can I take the home office deduction?
• What qualifies as "Principal Place of Business" for the home office deduction?
• Where do I enter the home office deduction for my business?

Your home office business deductions are based on either the percentage of your home used for the business or a simplified square footage calculation.   The Home Office Deduction  You can find more details in that link.   But if you are qualified to take the deduction, answers to your questions:

1- No, you don't enter the portion of income derived from the home office.

2- No, only the portion that relates to your business gets deducted

3- Yes, you cannot take the same deduction in 2 places

4- Your cell phone bill is not part of the home office deduction, but if you are self-employed, you can deduct the business portion of your cell phone bills.  You can use any reasonable method to allocate the cost between personal and business use.    But it is not part of the home-office deduction.

5-No, only the portion allocable to your home office.   No personal deductions are allowed.   But again, it depends on what method you use - see  The Home Office Deduction

[taxesx4]

Hi,

Yes, I work for a large company so I'm on a W2.  I live in California.  So if I understand correctly, even though I have a room which is a dedicated office in my house, I can't claim any percentage of my expenses, mortgage bill or cell phone bill on my taxes - the reason being that I'm on a W2 and not self employed. 

Thanks for the response.

[ReneeM7122]

Correct.  You can take a home office deduction only if you use it for business (not for W-2 employee) work.  It used to be allowed for the convenience of the employer, but the Tax Cut and Jobs Act eliminated that provision so you have to be "in business" in order to qualify.

To claim the home office deduction, a taxpayer must use part of their home for one of the following:

• Exclusively and regularly as a principal place of business for a trade or business
• Exclusively and regularly as a place where patients, clients or customers are met in the normal course of a trade or business
• As a separate structure that's not attached to a home that is used exclusively and regularly in connection with a trade or business
• On a regular basis for storage of inventory or product samples used in a trade or business of selling products at retail or wholesale
• For rental use
• As a daycare facility

Here is a link to the rules on the IRS website.

[taxesx4]

Thanks again for the information!