Home office deductions

By Erica Stark, Licensed Financial Advisor, Tax Specialist, Founder of TAPP Financial

Three years after the pandemic, according to the Pew Research Center, 35% of American employees are still working from home, a number up from 7% pre-pandemic.

When I start working with a new client, coming up with a plan to maximize the number of deductions they can take is a key consideration. It’s often a surprise to me how many people could be taking home office deductions but don’t. I wouldn’t want any of my clients to leave money on the table by not taking advantage of this potentially significant tax savings.

Our first step lies in determining if you are eligible to claim home office deductions.

If you’re self-employed—including freelancers and small business owners—or are an in-dependent contractor, you can claim a home office deduction if you use part of your home exclusively and regularly for business activities. This means the space must be your principal place of business or a place where you meet clients regularly.

Due to changes in tax laws over the past several years, for the most part, W-2 employees are no longer able to deduct home office expenses. Employees can only claim the home office deduction if they meet very specific criteria set by the IRS.

If you follow a hybrid work schedule, working some designated days at home and others at the office, you also most likely are not eligible for these deductions.

My topic next month will go into greater detail on the types of expenses you can deduct and in which cases you can claim them.

Feel free to give me a call if you work from home and would like to come up with a strategy for maximizing your benefits while adhering to tax laws.

TAPP Financial is located at 7003 Pearl Road, Suite 17B, in Middleburg Heights. Call 440-885-3133 or visit Tapp-Financial.com.