Home Office Deduction
Throughout the 2021 tax year, many people continue to work from home; however, only certain taxpayers will qualify to claim the home office deduction.
As a reminder, W2 employees (including S Corporation owners) are not eligible to claim a home office deduction; therefore, we continue to suggest approaching your employer to reimburse your home office expenses. Employers are still eligible to expense these qualified business expenses under an Accountable Reimbursement plan.
Home office expenses are available to both small business owners, whether they are homeowners or renters. The following article summarizes the specific requirements of the home to qualify as deductible home office expenses.
For those who qualify, two methods can be used to calculate the home office expenses:
- Simplified Method Annual calculation – $5 per square foot up to a maximum deduction of 300 square feet or $1,500.
- Percentage of business use – Annual home expenses multiplied by the percentage of the home devoted to business use.
Click the link below for more information. If you have further questions or would like to discuss whether you might be eligible for this deduction, please reach out to your tax advisor.