TOLEDO, Ohio (WTVG) - Millions of Americans transformed their homes into offices in 2020. Some had to fork up a lot of cash to make it happen.
But most people won’t be able to deduct those purchases on their taxes this year.
If you’re a W2 employee of a company, you’re out of luck. That’s thanks to the Tax Cuts and Jobs Act of 2017. It effectively got rid of home office deductions for employees through 2025.
That means you can’t claim that new computer you bought to work remotely on your taxes, even if you only use it for work.
“Your employer may reimburse you for some of those expenses,” said Dave Gang, the owner of Liberty Tax on Laskey Road in Toledo. “But as far as the tax return goes, there’s no deduction if you’re a W2 employee.”
But not everyone is in the same boat.
If you’re a freelancer, gig worker, or independent contractor, you can claim home office supplies on your taxes.
“If you fall into that category, you can certainly take business expenses against that income,” Gang said. “That would include your desks, your computers, your mileage to and from wherever you’re traveling to, office supplies.”
New this year, freelance workers will fill out a 1099-NEC form instead of the 1099-Miscellaneous form used in the past, Gang said.
More companies are allowing their employees to work from home permanently, which raises bigger questions beyond whether you can write off a pack of pens.
What taxes do you owe if you work remotely in one state, but the company is based in another? That also depends, Gang said, but is something at the center of some debate during this tax season.
“That’s a very hot topic in the tax world,” Gang said. “We’ll see where that goes.”
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