Tax Deductions for Remote Workers During a Pandemic

Tax Deductions for Remote Workers During a Pandemic

A global pandemic can really transform the way we live. With the current Covid-19 pandemic, working from home has become a new norm for thousands of former office workers in the US. For some people, working remotely is an ideal situation. However, for busy professionals, balancing work commitments and family life, this new daily routine can be stressful. Trying to find the space and the time to sit down and meet deadlines is a bit of a nightmare when you have young children in the house. So, if you’re thinking about upgrading your new office at home, don’t do anything until you’ve read this first. Let us take you through the ways that you can work remotely in a beautiful modern home office and save money through tax deductions.

Employed & Working From Home During a Pandemic

If you’re employed and working remotely due to the current pandemic, it’s important to understand the law relating to your new workspace. Often employed remote workers believe that they can still claim expenses for their home office and benefit from tax deductions, but unfortunately this is no longer the case in the US.

In the past, an employee who worked from home was able to claim the following as work expenses:

  • Upgrades to a home office
  • Painting or redecorating a home office
  • New equipment needed for remote work
  • Items to improve your productivity at home

Unfortunately, this is no longer the case.


Tax Deductions for Remote Workers During a Pandemic

New Rules for Employed & Working Remotely

The law has changed in the US in relation to employed workers who are working from home. In fact, the Tax Cuts And Jobs Act which is in place until 2025, stops employed Americans who are working remotely from deducting these expenses from their taxes. This has caused an uproar among employed workers who are now forced to work from home, and has even put off a lot of employees in the United States from wanting to work from home in the future.

Yet, with lockdown and working from home set to continue for longer than initial thought, there are still ways to upgrade your workspace while employed. Since your environment impacts your productivity, you can ask your employer to help you financially set up a workspace at home. 

In fact, in California, under Section 2802 of the California Labor Code, employers are required to reimburse their employees for any reasonable and necessary expenses they may incur in direct consequence of discharging their job duties. Now when we apply this to the current pandemic, it means that you could ask your employer to pay for your home office needs.

Basically, this law relates to the expenses an employer may have been responsible for when running an office such as electricity, water and internet bills, as well as investing in software, technology and office equipment. Now that employees are no longer in the office, these business expenses should not be pushed onto an employee now working remotely. So, if your energy and internet bills are increasing due to working from home, or you’re being told to purchase expensive laptops or software in order to continue working during a pandemic, your employer should compensate you financially! This can also include the expense of setting up a home office. This law may enable employed remote workers to ask their employers to pay for the following home office essentials:

In addition, this law is also being considered by other states such as Montana, South Dakota, New Hampshire and Illinois. If you are struggling to work from home and need to upgrade your workspace, contact your employer about helping you with your home office expenses. Let’s be honest, it’s in an employer’s best interest to have a productive member of their team who is interested in improving their workspace to enable them to do their job to the best of their ability.


Tax Deductions for Remote Workers During a Pandemic

Self-Employed During a Pandemic - Home Office

If you’re self-employed and working from home during the Covid-19 pandemic, you may qualify for home office tax deductions as long as your home is used for business purposes. To qualify for tax deductions for the self-employed, the part of your home that you use for your business must meet certain criteria.

Criteria to qualify for tax deductions for self-employed workers:

  • Your home office or workspace must be your exclusive place of business that is regularly used.
  • This place must be where you communicate with clients or customers.

Any home office tax deductions can be included however, you should be prepared to defend your tax deductions in the event of an IRS audit. To protect yourself and your business, always make sure to have detailed reports of your home office purchases and why they are required for your business.


Tax Deductions for Working Remotely During a Pandemic

Working Remotely as a Freelancer in the US

For freelancers, the pandemic and lockdown has probably not made much of a difference to their daily routine. Although, when it comes to freelance work and tax deductions in the United States, things can become a little tricky.

Often creative freelancers work remotely and from anywhere they feel comfortable. Their workspace can be within a home office, a bedroom, kitchen or even a basement. Freelancers tend to work either on a self-employed basis or as a contractor. Tax deductions for self-employed freelancers helps people to improve their workspace and environment while working remotely. But, in order to qualify you’ll need to create a home office or workspace with your business as the sole purpose for it. Failing to do this, means that no part of your home is actually designed for your work and you may find it difficult to qualify for tax deductions.

One thing to bear in mind as a freelancer, who enjoys working from different parts of the home, is that you don’t necessarily need to dedicate one room to your business. Instead, set up a workspace. A table in the corner of a room or a standing desk in the basement are all great home office setups that will help you qualify for tax deductions as a freelancer in the US.

For freelancers, we suggest the versatility of the Helium Surface Sit-to-Stand Desk Converter. This incredible design allows you to transform anywhere in your home into a modern workspace.

Tax Deductions for Working Remotely During a Pandemic

Best Home Office Furniture for Tax Deductions

Whether you’re employed or self-employed, working from home can be difficult. Just because you are working from home, doesn’t mean you need to feel uncomfortable though. Investing in your environment will help increase your productivity. A high-quality office desk and ergonomic chair will give you comfort and support throughout the day, helping you to stay focused and complete daily tasks. For a positive workspace, it is far better to invest in one piece of furniture that will stand the test of time, rather than a cheap alternative that might break after a couple of months.

For back and neck support, invest in an ergonomic home office chair such as the Ergohuman High Back Mesh Manager Chair with a synchro-tilt mechanism and pneumatic height adjustment and headrest.

For a high-quality home office desk that will help increase productivity, we recommend the Liberty Electric Height Adjustable Table. This versatile design allows you to work both sitting down and standing up and comes with a 10 year parts and labor warranty.

If you are self-employed, your home office needs to reflect your business well, especially if you’re inviting clients into your workspace, or having video conference calls. If you are able to benefit from tax deductions, you should treat yourself to a modern home office that promotes health and wellbeing as well as business success.


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