Tax season is here in the US and Work From Home (WFH) individuals are looking to make the most of it. Can WFH employees avail tax benefits? Tax experts caution that employees opting to work remotely from home often bear the brunt of related expenses, without the ability to claim them come tax time. Determining who qualifies for home office deductions can be a bit nuanced. In general, W-2 wage earner don’t come under the category of home office deductions, USA Today reported.
For those who are self-employed and utilize a home office exclusively and regularly for their work, there’s potential for tax deductions on certain home-related expenses. These deductions can include a portion of costs like mortgage interest, property taxes, homeowners’ insurance, and utilities, providing an opportunity to offset some of the expenses associated with maintaining a home office. It’s essential to keep thorough records and consult with a tax professional to ensure compliance with relevant tax laws and regulations, as per the USA Today report.
Last year, tax breaks for dividends and capital gains — profits from the sale of assets like stocks or artwork, which are taxed at lower rates than other sources of income — cost the government an estimated $153 billion. In 2022, 92 per cent of that benefit went to households making $200,000 or more, and 73 per cent went to those with incomes over $1 million, as per a report in NYT News Service.
FAQs:
Q1. Who can avail home office deductions?
A1. For those who are self-employed and utilize a home office exclusively and regularly for their work, there’s potential for tax deductions on certain home-related expenses.Q2. What do tax experts say to Work From Home employees?
A2. Tax experts caution that employees opting to work remotely from home often bear the brunt of related expenses, without the ability to claim them come tax time.
(Agency: The Feed)
