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Tax season: What can you deduct when working from home?

Tax Document
Posted at 6:15 AM, Mar 22, 2021

LAS VEGAS (KTNV) — The year 2020 saw many businesses and offices closing their doors and sending employees home. But working from your bedroom can sometimes come at a price. So what does that mean during tax season? 13 Action News anchor Tricia Kean gets answers from a local tax expert.

"There was definitely a lot of initial cost," said Michelle Balan.

UPGRADE MY LAPTOP

The Henderson resident quickly learned she wasn't equipped to work from home.

"I did need to upgrade my laptop because it couldn't handle the Zoom meetings," Balan said.

UPGRADE INTERNET

Once she had a new laptop, there was another issue.

"The Internet situation. Since the kids are home and doing distance-learning, that was a big one that I wasn't really anticipating. Because again when everyone is streaming at the same time, I can't afford to drop a Zoom call," Balan said.

WHAT CAN I WRITE OFF?

So Balan had to upgrade her internet service. There's a lot of valley workers who can relate. Suddenly you need an extra monitor, a printer, or maybe a desk. But what do all these purchases mean when doing your taxes?

"I definitely have questions about what can I write off?" Balan said.

CPA Kim Walker says the short answer is: it depends. It's bad news for anyone still employed and simply working from home. When it comes to new equipment or hardware upgrades:

ASK ABOUT REIMBURSEMENT

"None of that's deductible for those employees," Walker said.

She says your best bet is to ask your employer about reimbursement. Otherwise, she says contact your local lawmakers.

CONTACT LAWMAKERS

"I would love to see Congress put in something temporary for the year 2020, to allow those employees to write those expenses off... It wouldn't be a bad thing for 2021 either," Walker said.

The news is better for self-employed and independent contractors making work-related purchases.

"Those business expenses are deductible," Walker said.

WRITE OFF PART OF HOME

In fact, in those cases, you can do even more than just write off equipment or hardware upgrades.

"You have the ability to write off part of your home as a home office... Part of the operational expenses of your home will be deductible. It's going to be a math ratio based on square footage," Walker said.

Just be sure to keep receipts for everything. Bank and credit card statements aren't enough.

PROOF OF PAYMENT

"So you need proof of payment, plus the receipt to show what it is you purchased," Walker said.

As for Balan, she admits she didn't need everything she bought. But she says sometimes it's about the little things.

"When you have to work from home and you need to be able to be comfortable and relaxed to be able to do your work, you need that space and the elements that go with it," Balan said.