The COVID-19 pandemic has changed the way that Americans work forever. A lot of employers have started to allow their employees to work from home, either for good or on a semi-regular basis.
If your employer has told you that you can begin working from home, you’ll enjoy a long list of benefits. Working from home will put you in a position to put less wear and tear on your car. It’ll also help you to achieve a better work-life balance.
Additionally, there will be certain work from home tax deductions that you’ll be able to claim when you WFH. You’ll be able to write off a wide range of things when you do your taxes in April.
Before you start claiming tax deductions, though, you should learn more about what qualifies and what doesn’t. You won’t have to worry about the IRS coming after you when you get a better understanding of these things.
Here is everything you need to know about work from home tax deductions.
What Qualifies as a Work From Home Tax Deduction?
First things first: If you only work from home every now and then, you probably aren’t going to qualify for very many work from home tax deductions. The IRS has really scaled back on the number of work from home tax deductions that they allow in recent years.
But if you work from home all the time or, better yet, if you’re self-employed, there are many deductions that might qualify as work from home tax deductions. You should be sure that you take them into account when doing your taxes.
The home office deduction is one of the biggest work from home tax deductions that you might qualify for. As long as you have a home office set up in a part of your primary house, you may be able to use it to lower your tax bill.
You might also be able to write off things like your mortgage interest, your utilities, and even some home repairs if they were made to improve the working conditions in your home.
What Doesn’t Qualify as a Work From Home Tax Deduction?
As we just alluded to, you aren’t going to be able to claim many work from home tax deductions if you’re a full-time employee at a company. Even if you work from home every day, the IRS has rules and regulations in place that will prevent you from qualifying for work from home tax deductions.
You’re also not going to be able to claim work from home tax deductions for things like the food that you eat while you’re at home working or the cable bill that you pay so that you can watch TV at home as you work. You might find yourself on the wrong side of the IRS if you attempt to claim these deductions.
What Should You Do If You’re Confused About Work From Home Tax Deductions?
As you can probably imagine, it can be very confusing trying to navigate your way through the various work from home tax deductions. It’s not always easy to tell what does and doesn’t qualify as a work from home tax deduction.
For this reason, you should make sure that you work with an accountant at tax time to get your taxes done right. You’re not going to have to be concerned about making any mistakes on your taxes when you have a good accountant by your side.
Who Should You Trust to Help You With Work From Home Tax Deductions?
If you decide to hire an accountant to help you with work from home tax deductions, you should try not to just hire the first one you can find. It would be a much better idea to do your homework on the accountants in your area before choosing the best possible option.
They can also break down other complicated tax concepts like the standard tax deduction vs. itemized tax deductions. It’ll be nice to have them around to give you explanations when you need them.
What Might Happen If You Claim Work From Home Tax Deductions That Don’t Qualify?
Let’s say that you try to claim work from home tax deductions that don’t qualify. Then what?
Well, in some cases, you might get away with it. But you definitely shouldn’t count on that happening. There is a pretty good chance that someone is going to catch your mistake and call you out on it.
At that point, you could be subjected to fines and other penalties. You’re also going to have to pay whatever it is that you actually owe in taxes.
Because of this, you shouldn’t ever turn your taxes in with work from home tax deductions that you’re not sure about. It could come back to bite you in the end. It’ll make you wish that you had taken the time to consult a tax professional about them.
Make Sure You Claim the Right Work From Home Tax Deductions
The various work from home tax deductions can be a godsend for many people. They can make paying taxes so much more manageable for them.
But work from home tax deductions can also throw a monkey wrench into the mix when you’re trying to get your taxes done. They can confuse you beyond belief and potentially even get you into some trouble if you aren’t careful.
It’s why you should claim the right work from home tax deductions. It’ll leave you feeling more confident when you’re done doing your taxes.
Get more useful tax-related advice by reading through the other articles posted on our blog.