How do I deduct my home office as an employee?

July 17, 2019 by Steve Banner, EA, MBA
Woman working from home at her desk.

Up until the start of the 2018 tax year, certain taxpayers who worked for an employer could get a tax deduction for setting aside and using a part of their home for work-related activities. These activities could include meeting customers, making phone calls, doing other office work, or even storing stock or inventory samples. This tax benefit was commonly known as the “Home Office Deduction.”  
 
However, as part of the tax reform laws that were passed in late 2017, the home office deduction was eliminated for all tax years from 2018 through to 2025 for taxpayers who are employees. But this does not apply to individuals who are self-employed. For example, John, who is a self-employed carpenter, could claim the home office deduction if he meets the tests to qualify for it. Brad, on the other hand, who works full-time for John and uses his spare room as an office where he creates proposals and invoices for the business, is not allowed to claim the deduction − simply because he is an employee. 
 
There are also exceptions for some other types of taxpayers apart from those who are self-employed. The new restriction on the home office deduction does not apply to employees with impairment-related work expenses, members of the armed forces reserves, qualified performing artists, and fee-basis state and local government officials. 

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Steve Banner, EA, MBA
Tax Content Developer

 

Steve Banner began his career in the field of income tax in 1977 and has since gathered business experience in a variety of countries and cultures. In addition to the United States, he has lived and worked for extended periods in Australia, Saudi Arabia, Canada, and Sweden. Along the way he studied Adult Education and earned a Bachelor of Education, Master of Educational Administration, and MBA. He joined TaxAudit in 2016, where he is a Tax Content Developer.


 

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