Now that we are about nine months into working from home due to the COVID-19 pandemic, there is a good chance you have invested in some home office equipment.
But who should pay for this equipment? According to a survey by HR consultancy Mercer, about two-thirds of companies are providing or reimbursing for needs of newly remote workers; 55% are covering laptops, 33% mobile phones, 26% printers, and 24% ergonomic equipment.
What tax issues should you consider if you’re working from home? Mike Hennessy, CFA, CFP®, founder and CEO of Harbor Crest Wealth Advisors in Fort Lauderdale, Florida, says that if you’re a salaried employee, your best route is to get your employer to pay for home-office equipment and supplies up-front, or to get reimbursed for them. Under current tax law, such employees are not allowed to deduct those out-of-pocket expenses on their own taxes come April 15.
If you are not a salaried employee, however — for instance, if you’re a solo entrepreneur who does a variety of contract work — those rules do not necessarily apply. “As long as you are self-employed and part of your home is used for business use, you can take advantage of the home office deduction,” Mike Hennessy said. That way a percentage of related costs like mortgage interest, insurance, supplies, utilities, and repairs will be deductible.
Read more in the Reuters article, “Everyone has a home office now. So who's paying for it?”, here.
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