Telecommuting is a great work arrangement for some folks. Instead of heading into an office every day, telecommuters work from home either exclusively or on a regular basis. This can ease the burden of a long (or impossible) commute. It’s also the only real option for virtual-based companies comprised of remote workers: If there’s no office, you have to telecommute!
Working from home, however, also comes with some sacrifices. If you’re not in an office environment, there’s no stock of supplies for you to access when you need to refill your stapler or grab a new notebook. Unless your workplace is in the habit of sending you care packages, you’ll probably have to purchase all your work-related supplies yourself.
Which Deductions Are You Eligible For?
This begs the question: if you’re buying things for work, can you deduct those purchases on your taxes? The answer: yes and no. The IRS allows you to deduct “ordinary and necessary expenses” related to your job if your employer did not or will not reimburse you. However, you must itemize your deductions in order to claim these expenses.
You also have to list work expenses under the umbrella of “miscellaneous itemized deductions.” This is important because you can only take miscellaneous itemized deductions that exceed 2% of your adjusted gross income (AGI).
Long story short: it may not be worth your while to deduct work expenses as a telecommuter. You have to weigh the benefits of taking the standard deduction versus itemizing your deductions. You also have to account for the 2% of your AGI that you have to deduct from your total expenses tally.
As you can tell, the tax code around telecommuting deductions can get pretty complex! For tax help in Virginia Beach, contact the tax team at Taxation Solutions, Inc. We can help demystify telecommuting deductions and other tax issues. Give us a call today!