I’m now a telecommuter. Can I deduct a home office?

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Q. I have been working from home since the start of the pandemic. Initially it was due to my office being closed but the office is not. However now my company has permanently closed my local office. I have been officially designated as a telecommuter and I can only work from my home office. How does the tax law work in my situation?
— Worker

A. There have been changes to the tax law that make your situation confusing.

Eligibility to deduct expenses depends on if you are a W-2 employee or an independent contractor.

The Tax Cuts and Jobs Act eliminated home office deductible expenses for employees working for employers — W-2 wage earners, said Altair Gobo, a certified financial planner with U.S. Financial Services in Fairfield.

However if you are a small business owner or self-employed and work from home, you most likely can take advantage of the home office deduction, he said.

“Due to the Covid pandemic it will probably be easier to make your argument of home office deduction since many of us are working from home at this time,” he said. “You still must have proper records and actually qualify for the deduction.”

These qualifications can be determined by IRS Publication 587:
• Is a portion of your home “exclusively and regularly” used as your principal place of business?
• Do you have a specific place where you meet or deal with your customers/clients?

If you’ve answered yes to these two questions, you will most likely qualify for home deduction, Gobo said.

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This story was originally published on Feb. 10, 2021.

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