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Home Office Deduction 2018

7/23/2018

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The Tax Cuts and Jobs Act (TCJA) disallows all miscellaneous itemized deductions subject to the 2% floor for the tax periods 2018-through 2025.  What does this mean for the Home Office Deduction during the aforementioned tax periods?  

Company Employees who work from home will no longer be eligible to deduct any home office expenses as in past years. In prior years, all the expenses that went into making the home office space comfortable from the paint to the furniture were deductible as home office expenses.  Now you will be working from home for the pure convenience of it, no more perks for the next 7 years (including the current year)!


Good News for those Self Employed- You can still deduct eligible home office expenses against your self-employment income.  


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Here is how you qualify:
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  • ​Part of your home that is attributable to business must be "exclusively and regularly for your trade  or business;
  • That part of your home must be your principal place of business;
  • And a place where you meet clients, patients, and customers
  • Only one home office per attributable home office space
Notably, if you use a part of your home as a workspace, it must be space that is used solely for business.
How to determine the amount of space attributable to your business as a home office deduction?  If your home is 3,000 square feet and your home office is 300 square feet you would claim 10% of your home related expenses as a home office deduction.



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    Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.

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    To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
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    Author

    Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion.  Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.

    Keana founded this website and decided and created this blog page to offer a space for those seeking knowledge to understand, however not to be confused with advice or planning strategies.

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