December 15, 2020
By: Cassie Porter
One of the most frequent questions we have been asked during the COVID-19 pandemic is “can I deduct my home office since I am working from home?”
To be eligible to deduct your home office there are two requirements that need to be met. The first requirement is that the designated space must be regularly and exclusively used by your business. An example of this would be a spare room that is set up as an office or possibly a detached garage or shed. A kitchen table does not count as an office space as that would be considered a shared space within the home. If your home office is a spare bedroom the IRS may disallow the deduction if there is other furniture (like a bed) in the room if you were subject to an audit.
The second requirement is that it must be your principal place of business. This means you do not have a designated office space anywhere else. If you are an employee, you normally have a designated desk space at the business location. If you are a W-2 employee that works 100% remotely it is possible to have a home office, however under the Tax Cuts and Jobs Act this deduction was repealed. An example of some professions that may qualify for the home office deduction include a realtor, independent contractor, or small business owner.
If you have any questions about how this applies to your specific situation, please contact Faw Casson.