Odds are, your couch or kitchen table is now your office. In fact, if you actually have a desk, never mind a whole office room in your home, you’ve got a better setup than a lot of us. The thing is, whatever you got — a desk, ergonomic chair, laptop, computer monitor, printer, ink, etc. — is technically a work expense. Does that mean you can write it off on your taxes?
Well, that depends on one thing: Are you your own boss?
If you are (meaning, you’re a freelancer or independent contractor and utilize 1099s and W9s rather than a traditional W2 for your taxes), these various expenses can be deducted from your taxable income. Even the square footage of the space you utilize to do your work can count.
If you’re a full-time employee, though, the government recently decided that you can simply go fuck yourself. Prior to changes to tax law executed by Donald Trump in 2018, you could deduct work-related expenses such as gas mileage or home office supplies from your income, up to two percent of your adjusted gross income. But that’s no longer.
Ideally, as a full-time employee, your employer will reimburse you for these expenses, anyway. If not, well, you’re kind of just shit out of luck. “If I’m buying ink or paper for a printer, as an independent contractor I could put that as an office expense on my Schedule C directly against my income,” explains Kevin Conarchy, a certified public accountant in Chicago. “But as an employee, I can’t get an itemized deduction for that anymore. The only thing I can do is see if my employer will reimburse me for that.”
But again, on the flip side, if you are indeed an independent contractor, almost any work-related expense can be deducted from your overall taxable income, per Conarchy,. This includes not only the basic tools you might need to do your job, like your computer, but even a percentage of your electricity, internet and phone bills, as well as half of the cost of meals that could be considered business meetings. Even industry-specific magazine publications or educational courses related to your field can count.
Regardless of whether you rent or own, you can also deduct $5 per square foot of your office space up to a maximum of 300 feet, depending on how you file. It doesn’t necessarily have to be its own room to qualify as a home office, but it is technically supposed to be a space not used for anything else. “According to the IRS, a home office is defined as a space that you use primarily and exclusively for your job,” says Conarchy. “So, they don’t want you to say you use a desk 50 percent of the time for work, 50 percent of the time to watch TV.”
It is possible to deduct more than the maximum $1,500 if you have a larger space, but this requires a more complicated method of filing. Generally, it’s recommended that independent contractors utilize a CPA to file their taxes in order to reap the maximum benefit. Exactly how much money you can save on your taxes from including these expenses depends heavily on what your expenses are, but also how you file your taxes.
Unfortunately, though, despite the fact that almost everyone who is working now is doing so from home, those of us who are considered actual employees are gonna keep paying out of pocket for the Wi-Fi and whatnot we use to get our job done.
But hey, you’re probably saving money on gas, right? Oh, right — and car insurance.