View Full Version : Home office deductions
FromMyColdDeadHand
11-16-20, 16:55
Getting tax info here is like getting gun info from accountants, outside of EuroDriver IIRC, but with so many more people working from home, what are the general rules for claiming exemptions on your taxes? More specifically, is there anything that needs to, or should be, done before the end of the year to maximize the breaks?
Write off you cable/internet?
Home office by space break?
Other expenses that we should track?
Bought a desk and a nice chair?
Is there an income or other tax provision (AMT?) that makes it not worth it?
If you work for someone else, pretty much nothing. You can expense things to your employer if they agree.
If you work for yourself and have an EIN number, lots of things.
If you work for someone else, pretty much nothing. You can expense things to your employer if they agree.
If you work for yourself and have an EIN number, lots of things.
This.
If you get a W2, you’re SOL
If you get a 1099, claim everything, but you’ll still owe unless you paying proactively.
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Yes to the above.
If you are an employee working from home,
your only "break" is not having to spend your time and fuel/insurance/mileage commuting.
Averageman
11-16-20, 19:31
About time to subcontract your labor?
I'm just saying that's what is on the horizon.
FromMyColdDeadHand
11-17-20, 00:28
About time to subcontract your labor?
I'm just saying that's what is on the horizon.
I begged my boss a couple of years ago to take me on as a consultant so I could get out of the HR/safety/‘development bs. No dice.
Working in our facility is an option, at least here in Alabama. I think it's safe to say that fuel, car maintenance, clothing savings outweigh a moderate cost to maintain a workspace. I choose to work in the facility, normally. We have one Unity programmer who has never worked from home because he didn't have the space. Not hard to social distance in a nearly empty building.
Andy
I always recommend people start a side business just for this. If your into axes start a business that refurbishes axes. If your into pocket knives, easy enough to start a business that sells / resells pocket knives. If you like wine, start a blog that talks about wine. Ect...
Just dont abuse it - hogs get slaughtered pigs get fed!
Also, if the office is located in a city where city income tax is due, you can directly pro-rate taxes owed for days worked outside the city, just like when traveling for business.
Any wages earned outside the locality are NOT subject to that local tax. This includes working from home if your home is outside the city.
I used to be able to write off a home office, but I lost all of my deductions with the Trump tax change...
And you cant write off shit anyway unless you have enough deductions to exceed the standard(12k/24k)...
Is it bad I kind of want the Trump tax law change to go away so I get all my deductions back?
I used to be able to write off a home office, but I lost all of my deductions with the Trump tax change...
And you cant write off shit anyway unless you have enough deductions to exceed the standard(12k/24k)...
Is it bad I kind of want the Trump tax law change to go away so I get all my deductions back?
The increased standard deductible allowed simpler tax filing for the majority of people, but it's never bad to wish for a change that results in paying less taxes. $12000 will furnish a nice home office, won't it?
If you can't write off enough stuff to break the standard deduction, doesn't that mean the standard deduction change benefits you?
Andy
The increased standard deductible allowed simpler tax filing for the majority of people, but it's never bad to wish for a change that results in paying less taxes. $12000 will furnish a nice home office, won't it?
If you can't write off enough stuff to break the standard deduction, doesn't that mean the standard deduction change benefits you?
Andy
I lost about 20k of deductions due to my job that disappeared. The ability to write them off was removed from the tax code.
Thats different than not being able to exceed the standard deduction. I could still EASILY exceed it if I could still deduct everything I could before...
Those deductions plus my home loan interest and my property taxes was always FAR HIGHER than the standard...and still would be today, by 10-15k dollars.
ETA:
Thinking of a standard deduction as a way to pay for qualified business expenses is wrong thinking IMO... Standard deduction, in theory, is to help offset sales tax paid for necessary items like food, clothing, etc... Lets use 100k and married(24k) standard deduction as an example. You would probably end up at about 18% real tax(because you dont pay 24% on the total amount). So 18% of 100k is 18k dollars you owe the government. lets deduct our 24k and tax the remainder at the same 18%. 86k*.18=15400 for a difference of 2600 in taxes paid... So 2600 more dollars in your pocket... I wouldnt call that a windfall, but it helps offset the sales tax you pay at the grocery store, clothing store, fuel, etc... Thats always the way I have thought about the "standard deduction"... Its money the federal government gives you credit for that you are paying to the state through purchases.
then above that you have qualified business deductions... which also encompasses certain workers that are forced to use their own cash to buy stuff for their jobs... like teachers... they lost their deductions for classroom materials as well(and I dont even want to get into the discussion of teachers buying their own supplies which is also horse shit, but I digress).
I'm tracking. The loss of deductions for work related expenses is a bitter pill.
I'm on the side of reducing SALT exemptions - why should the rest of the country subsidize high taxes in a few areas.
Andy
I'm tracking. The loss of deductions for work related expenses is a bitter pill.
I'm on the side of reducing SALT exemptions - why should the rest of the country subsidize high taxes in a few areas.
Andy
Well, they should cap it for everybody instead of cutting it off for everybody.
Im just going to throw another number out there of say another of the standard deduction, so an additional up to 12k or 24k that if you own a home you can take advantage of... right now its standard or you can take your home(interest plus tax) if it exceeds the standard... That was one of the big incentives to home ownership was it could reduce your tax liability... thats been taken away... although it doesnt seem to be keeping the real estate market from booming.
Well, they should cap it for everybody instead of cutting it off for everybody.
Im just going to throw another number out there of say another of the standard deduction, so an additional up to 12k or 24k that if you own a home you can take advantage of... right now its standard or you can take your home(interest plus tax) if it exceeds the standard... That was one of the big incentives to home ownership was it could reduce your tax liability... thats been taken away... although it doesnt seem to be keeping the real estate market from booming.
It did help offset the expenses of owning a home and make a mortgage a little easier to accept.
It is strange that the real estate market appears to be unaffected by that change.
Pacific5th
11-17-20, 15:27
You guys are getting deductions still? As a transportation worker I used to be able to write off my out of town meal expense, some work cloths, cell phone, ect. It was significant. I lost money on the Trump Tax cut. But it didn’t hurt the middle class did it? At least I’m feeling that trickle down shit.
Pacific5th
11-17-20, 15:28
Double post
One thing to be aware of is if you do qualify for a home office deductions, it may affect your basis in your home. I am not an accountant and don't remember the specifics, but it lowers the cost basis for your home. What this means is that if you don't qualify for a rollover to a new home, and have to pay capital gains tax on your sale, you have a larger gain and hence more tax. Again, talk to an accountant if this affects you.
With regards the Trump tax cut. I lost a lot of deductions for state tax and property tax and stuff (I still itemize more than the larger standard). However, my overall fed income taxes for the year went down, even with the smaller deduction, due to the lower rates set by his tax cut. Studies estimate that over 80% of American tax payers ended up paying less than they would have, even where deductions were lessened.
You guys are getting deductions still? As a transportation worker I used to be able to write off my out of town meal expense, some work cloths, cell phone, ect. It was significant. I lost money on the Trump Tax cut.
I am also a transportation worker and lost a lot of deductions based on that.
I mean, im not mad, because greater good type stuff, but i always thought it was a joke when they said it was a giveaway to the millionaires and billionaires... of which I am neither...
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