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Home Office Tax Deductions for Business- Part Three of Four - For an Employee

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Business Use of Home Deduction- Part Three of Four - For An Employee

 

The business use of home deduction is often misunderstood and there are very specific requirements you must satisfy to qualify for the deduction.  This article is part of a four part series starting with the basics, meeting the requirements, business use of home as an employee and ending with how to calculate the business use of home deduction.  In this article we will focus on meeting the requirements to take the deduction as an employee.

 

Employees Only: Your Home Office Must be for the Convenience of Your Employer

In addition to satisfying one of the basic requirements listed in the article “Business Use of Home- The Basics”, employees may only take the home office deduction if they maintain the home office for the convenience of their employer. An employee’s home office is deemed to be for an employer’s convenience only if it is:

A condition of employment ( you should have a letter to that effect), and
Necessary for the employer’s business to properly function, or
Needed to allow the employee to properly perform his or her duties.

The convenience of employer test is not met if using a home office is for your convenience or because you can get more work done at home. For example, you won’t pass the test if you have an office at your employers’ location but like to take work home with you. However,  you would pass the test if your employer doesn’t provide you with an office, or if there is some valid business reason why you must work at home (i.e. required to work outside of normal office hours).

If you cannot qualify for the home office deduction, but regularly use your office for work, try to get your employer to reimburse you for your home office expenses. The reimbursement would not be taxable income so long as you properly account for your expenses.

Business Use of Home Deduction- Part One of Four- The Basics

Business Use of Home Deduction- Part Two of Four- Meeting the Requirements

Business Use of Home Deduction- Part Three of Four - For An Employee

Business Use of Home Deduction- Part Four of Four-Calculating the Deduction

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