Work from home during pandemic? It’s unlikely you can deduct home office on taxes

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With tax season around the corner, some might be starting to think about what kind of write offs they can make on their taxes amidst a coronavirus pandemic that spurred many to work from home.

For example, can you claim a home office on your federal income tax?

“Unfortunately, if you’re an employee, you won’t be able to deduct expenses for working at home, including home office expenses, on your federal income tax return. The Tax Cuts and Jobs Act suspended miscellaneous itemized deductions including unreimbursed employee business expenses like the home office deduction. One small silver-lining – seven states, including New York, still allow deductions for unreimbursed employee business expenses on the state income tax return,” said Nathan Rigney, lead research analyst at the Tax Institute at H&R Block, in a statement.

To see additional answers to frequently asked questions at the New York State Tax Department regarding state tax topics, visit: https://www.tax.ny.gov/pit/file/nonresident-faqs.htm

Rigney continues that self-employed taxpayers are eligible to deduct home office expenses if all the requirements are met including: the use of that part of the home must be regular and exclusive for conducting business, and the home must be the principal place of your business.

“There are a few exceptions to this test, but generally a home office must be your principal place of business,” information from Rigney continues.

In preparation of the upcoming tax season, H&R Block advises everyone to keep notes of when they started working from home, if and when your employer closed your office, if and when your employer reopened your office and invited you back to work and If and when you returned to your office.

Further, “... cities and states only tax income of people who live or work in that city or state. If you are one of the millions of Americans working from home, you may only owe tax to the state where you live and work beginning from the time you started working from home. These records will help you and your tax professional determine how to allocate your earnings between multiple states and cities,” information continues.

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