Do We Get Tax Breaks for Working From Home During the COVID-19 Pandemic?

Welcome to Ask Clark, a column designed to answer your financial questions, by money expert Clark Howard.

With Many Employees Working Remotely Last Year, Are There Tax Breaks We Should Know About?

Leah from Georgia asks: “With so many of us working from home for much of last year, are there tax breaks we should be aware of? Any suggestions — on how and what deductions could be available for those of us using our homes as offices too — would be helpful.”

Clark’s Take on Tax Breaks for Working From Home

The Internal Revenue Service (IRS) has made a pretty clear separation between workers who can and can’t claim tax breaks for working remotely, and that hasn’t changed despite the COVID-19 pandemic.

Clark says: “The tax code is not your friend on this if you’re a ‘W-2 employee.'”

“If you are a ‘W-2 employee’ [a typical, salaried employee and not an independent contractor], the expenses you’ve incurred working from home are not going to benefit you. If you are a 1099 person — you’re paid as an independent contractor — those expenses are deductible.”

More good news for independent contractors: “You may even be able to take a portion of your home and deduct a cost for it, known as the home office deduction,” Clark says.

For a detailed look at how the government defines deductible home office expenses for independent contractors, read this news release from the IRS.

To hear Clark’s full take on this question, listen to the segment:

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More Tax Resources From Clark.com:

• Free State and Federal Tax Filing Options
• Here Are the New IRS Tax Brackets for 2021
• Why You Do Not Want to Get a Big Tax Refund Check