How to Deduct Home Office Expenses under Tax Reform

by Julie A. Welch, CPA, CFP®, PFS; and Cara L. Smith, CPA, CFP®
Julie A. Welch, CPA, CFP®, PFS, is the director of tax services and a shareholder with Meara Welch Browne P.C. in Leawood, Kansas.
Cara Smith, CPA, CFP®, is a senior tax manager with Meara Welch Browne P.C. in Leawood, Kansas.

In this world of technology and constant connectivity, working remotely has become more common. 

Either as an employee or as a self-employed person, a home office can provide convenience, flexibility, and a lower overhead. In addition to skipping the daily commute, a tax deduction has been available for working from home in the way of the home office expense. Tax reform did not change the deduction, just the ability for some taxpayers to claim the deduction. Self-employed persons are still able to take the deduction on a Schedule C and are subject to the same strict guidelines for deducting the home office expense as in past years.

For employees, however, the new tax law (TCJA) eliminated the miscellaneous itemized deductions formerly reported on Schedule A of an individual’s Form 1040. To make up for significant cuts to deductions, the TCJA doubled the standard deduction available to individuals: $24,000 for married couples filing jointly; $12,000 for single filers; and $18,000 for those qualifying for head of household status in 2018.

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