Is My Home Workspace Tax Deductible?

Is My Home Workspace Tax Deductible?

April 22, 2021

A record number of Americans began working from home last year due to the coronavirus pandemic. And that number is only going to increase—according to a study prepared by Upwork, 36.2 million Americans will be working from home by 2025.

While some of these people are comfortable working from the couch, many prefer the peace and quiet of a home office. Fortunately, some filers may be able to claim their office as a deduction during tax preparation in Hayward, CA. Continue reading to learn more about deducting your home office this year.

What qualifies as a home office?

The tax code is very explicit about what qualifies as a home office. A home office doesn’t need to be a separate room, but it must be an area that is used “regularly and exclusively” for business. So, while a foldout table in the nook of your basement can be considered an office, the kitchen table where your family eats dinner cannot.

Who can take a home office deduction?

Unfortunately, not everyone who has an eligible home office qualifies for the home office tax deduction. If you’re employed by a company but work remotely, you do not qualify. However, if you have a freelancing gig in addition to a full-time job with an employer, you may qualify.

Those who are self-employed qualify to deduct their home office during tax preparation in Hayward, CA. Even if you were just self-employed for a few months in 2020, you can still deduct your home office.

How do I calculate my home office deduction?

Home office deductions can be filed one of two ways: the standard option or the simplified option. You deduct actual expenses when using the standard option. This includes everything from the paint used for the office to your utilities and homeowners insurance.

The IRS adopted a simplified option in 2013. When you go this route, you can deduct $5 per square foot of your home office, up to 300 square feet.

The standard option requires more calculations and extensive recordkeeping, but it can result in a higher return.

Why hire Menjivar & Company CPAs, Inc.?

Attempting to prepare your taxes on your own can lead to disaster. Here are a few reasons clients choose us to handle their individual and business’ taxes:

  • Worry-free filing: When you work with our CPAs, you can rest easy knowing your taxes will be filed accurately and on time. Simply hand us all of your financial information, and we’ll take care of the rest.
  • Maximum refund: We’re dedicated to maximizing our clients’ refunds. We’re thorough in searching for all of the possible deductions and taking them whenever possible.
  • Additional services available: In addition to yearly tax preparation, we offer services like financial consultation, payroll solutions and IRS representation. We’re your one-stop shop for all of your financial needs.

The tax filing deadline has been extended to May 17, but don’t wait until the final few days to begin tax preparation in Hayward, CA! Call Menjivar & Company CPAs, Inc. today to get an initial consultation for your tax needs.

Categorised in: