Is your #WFH home office tax deductible? Watch the video to learn what the IRS says is a home office, how much square footage you need for a write-off, remote worker and renter requirements, how to calculate your home office tax deduction, and more. Don’t miss out on getting every tax dollar you deserve!
00:19 What does the IRS consider a home office?
01:06 When is a home office deduction allowed?
01:32 How do I calculate the tax deduction the traditional way?
02:18 I have an IRS-allowed home office—how do I calculate the tax deduction the easy way?
02:59 My employer pays for my home office expenses, is this money taxed?
#taxhelp #homeofficededuction #taxcredit #selfemployedtaxes #selfemploymenttax
Subscribe to Jackson Hewitt: / jacksonhewi. . Visit jacksonhewitt.com/
TRANSCRIPT HIGHLIGHTS
Have you been lucky enough to continue your job from home? Today I'll be answering your questions about working from home and give you tips on how you can save money on taxes and when you should perhaps consider to request a reimbursement from your employer. What does the IRS consider as a home office? There are lots of myths, rumors, mistakes and tax information from Cousin Bob that are just plain wrong related to working from home and the home office deduction. The IRS describes an office and home as an area separated from the living part of the home used only for business to either meet clients, maintain books and conduct other business related needs, but used exclusively for this purpose. The area must be completely separate from all other family areas and friends in the home. This means that sitting at your kitchen table drafting your emails or walking the dog during a conference call does not qualify as a home office in the eyes of the IRS. So when is a home office deduction allowed? Well, taxpayers who are self-employed, running a side gig or separate business, or have a farm are allowed the home office deduction. No one else. So bad news for you folks working at home. You generally do not get a home office deduction under the tax law. I have an IRS allowed home office now. How do I calculate the tax deduction? Well, there are two ways to determine the amount of tax deduction for a home office. The long hard way and complicated way, or the easy short way. But both with considerations. For the traditional longer method, it is a more detailed approach needing detailed information. You must know the square footage of your home. And the square footage of the office. Or the number of rooms overall on the home and the number of rooms used. You need to know the cost of operating your overall home, and the cost of operating the individual office. For example, annual mortgage payments, utilities and other costs may all need to be tracked. But as I mentioned, the IRS also offers a simplified option called The Safe Harbor method, which allows a standard five dollar per square foot deduction. This is calculated by multiplying the square footage of the home used exclusively for the home office by five dollars, but the square footage cannot exceed 300 square feet, making the maximum deduction under the Safe Harbor method about fifteen hundred dollars. Individuals who use this simplified option cannot deduct any other expenses related to the home or the home office, but they can deduct expenses or business expenses unrelated to the use of the home or the room, such as business expenses for your computer, office supplies, paper ink. Those types of things. My employer pays my home office expenses. Is this money taxable? If your employer pays your home office expenses you will be in one of two situations. Either your employer is paying you an additional amount of income, or they're reimbursing you for your expenses, and these are very very different situations when it comes to your taxes. And you need to be sure which situation you're in or risk a mistake on your tax return. If your employer simply pays you an additional amount of money every pay period, once a month once a quarter, etc, then this is typically taxable income and will be included in your W-2 as wages, and you cannot claim a tax deduction against this money. If on the other hand your employer reimburses your home office expenses, what your expenses you incur while working at home, like the internet expenses, you incur, office supplies, printer supplies, and other costs, it's considered non-taxable income, because your employer is reimbursing you for expenses. You usually have to provide receipts to your employer for this type of an arrangement, but there is no taxable income in this situation, which is a good thing. Working at home is complicated and can cause mistakes, and you can also miss a tax break if you're not watching closely. So know the rules if you have more questions about your employment changes and working from home. Reach out to your local Jackson Hewitt Tax Pro for help and schedule an appointment at jacksonhewitt.com.
Информация по комментариям в разработке