More Americans than ever are working from home during the coronavirus pandemic. According to data from Gallup, 62% of employed Americans have worked from home during the crisis. While working from home does have some negative aspects, many workers are looking to take advantage of a home office tax deduction for 2020. But how do you know if you qualify?
According to the Internal Revenue Service (IRS), the home office deduction is available for homeowners and renters, and applies to all types of homes. However, employees may not claim a home office deduction — it only applies if you are self-employed or an independent contractor. As a result of the 2017 Tax Cuts and Jobs Act (TCJA), you cannot deduct home office expenses if you are an employee for the tax years 2018 through 2025.
If you are self-employed or an independent contractor, you may deduct expenses such as mortgage interest, insurance, utilities, repairs, maintenance, depreciation and rent as long as your home is your principal place of business and you exclusively use a portion of your home for conducting business on a regular basis.
Even if you don’t qualify for saving money on your taxes while working from home, there are still other ways you can save money during the coronavirus pandemic.