Can you deduct “work from home” expenses?

COVID-19 turned millions of you into stay-at-home workers. You had to create space for desks, computers, printers, fax machines, and office supplies. Some of these expenses weren’t paid by your employer. In addition, your utility bills, internet access or telephone expenses may have increased during that time. And while expenses increased, your income most likely didn’t.

When you file your tax return for 2020, you may be wondering if you can re-coup some of those expenses. Are there tax benefits for the inconvenience of being displaced from your regular workplace and forced to work from home?

In short, it depends on how you are paid by your employer. Are you an employee or an independent contractor?

If you answered employee, you are out of luck claiming those expenses on your tax return.  The Tax Cuts and Jobs Act of 2017 eliminated the deductions for home office expenses and unreimbursed employee expenses previously allowed. As an employee, you cannot take any work-related expenses for the business you conduct at home.

You may, however, be able to recoup those expenses in a different way. Your employer can purchase the equipment and claim it as a business deduction. This means they own those items, and the expectation is that you should return those items to them eventually. Another option is employer reimbursement for those expenses.  If you request reimbursement, the items need to be “ordinary and necessary” in the industry you work in. This may include items that employees have available for personal use, such as a cell phone, computer, printer, or fax machine because the IRS deems these as “de minimis fringe benefits.”

To avoid classing the expenses as taxable income to you, employers should have an “accountable plan,” a set of policies stating what qualifies for reimbursement. Provide your employer with receipts, and it is important you are only reimbursed for the actual amount (no rounding up to the nearest dollar).

COVID-19 has created a challenging situation for many of us, including where and how we work. You sheltered yourself from family members, pets, and various other distractions to continue to do your job.  Should you personally pay additional expenses while working at home too? Of course, the answer to this should be “no.”

During the pandemic employers, too, have juggled additional costs, loss of income, and the retention of valued employees while trying to stay in business. It’s a sensitive subject, but consider asking your employer about reimbursement; they may be able to help.

If you are looking for a fee-based advisor that is independent, and have at least $100,000 to invest, let’s explore working together.  Stratos Wealth Partners are a group of professionals with decades of experience in providing the financial guidance, impartial strategies for wealth accumulation and tax management.

Contact us by phone at (928) 460-5507, visit, or stop by our office in the Old Santa Fe Train Depot, 100 E. Sheldon Street, Suite 105, Prescott, Arizona 86301.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Stratos Wealth Partners, Ltd., a registered investment advisor and a separate entity from LPL Financial.  Stratos Wealth Partners and LPL Financial do not provide legal advisor or tax services. Please consult your legal advisor or tax advisor regarding your specific situation.