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COVID Reveals a BROKEN “Tax Cookie Jar” for At Home Employees
A question received: I’ve worked from home since March 2020 because of COVID. Can I claim my home office expenses on my 2020 taxes?
The tax year and the employment status (employee vs sub contractor or self employed) matters.
For 2020 tax year, there may be a home office tax deduction for:
1. Subcontractor (No taxes taken out of check, receive a 1099 MISC form at year end instead of W-2)
2. Self employed (own a business)
BUT: No 2020 tax year home office deduction for employees (Trump Tax Cuts and Jobs Act). Prior to 2018 tax year, there was an EMPLOYEE business tax deduction and no employee tax deduction until AFTER tax year 2025 (unless Congress changes its mind)
For employees, verify if your employer can reimburse the home office expense as part of an accountable plan. If it’s allowed, then the employee gets a NON TAXABLE EXPENSE REIMBURSEMENT, and the employer gets a tax deduction. . .
Think outside the Box. More than one way to stop the COVID wallet raid .