What Remote Workers Need To Know For Tax Season
Content
Price can also be a factor when hiring a tax professional for this most unconventional of filing years. The price of tax preparers can vary wildly, and it may be beneficial to fork over a bit more than you typically do for someone who knows the new guidelines and can adequately file your remote-worker return. Doing your due diligence when hiring a true professional will give you peace of mind in the long run. A recent Harris Poll showed that many people are “not very” familiar with the tax laws in their state of residency or the state where their employer is located. Taking time to read up on the tax implications of remote work will help to stave off frustrating hiccups down the road.
Whether or not you can claim those tax breaks, however, depends on your employment status. The 2017 Tax Cuts and Jobs Act suspended the home office deduction through 2025 for employees who “receive a paycheck or a W-2 exclusively from an employer,” according to the IRS. If you receive a Federal W-2 form from your employer then it doesn’t matter if you work from home 100% of the time, 50% of the time or not at all – you can’t deduct work expenses to reduce your taxable income.
Can I Deduct My Summer-Time Moving Expenses?
The amount you can deduct is still limited to the amount of income from business activity. You can also deduct supplies that you buy like paper, printer ink, or supplies for your customers, and you can take the home office deduction. Before the pandemic began, remote work wasn’t super common among salaried employees. Last year, however, a large number of people did their jobs from home because it wasn’t safe enough to return to an office due to COVID-19. If you use your home for more than one business, file a separate Schedule C for each business.
According to the IRS, if you are currently receiving unemployment benefits, you can have tax withheld so you can avoid owing taxes on this income when you file your taxes in 2021. Your federal income taxes shouldn’t be a problem, but your state taxes—depending on where you live and work—could be, according to the Wealth Enhancement Group, a wealth management company. Forty percent of the space is devoted to a home office, so a person how do taxes work for remote jobs seeking the home office deduction can tally up things like their rent, utilities, renters’ insurance and improvements to the apartment. While employees who now work remotely may feel like they’re missing out, the home-office deduction isn’t generally leading to outsized savings for those who take it. In the simplified version, you can take $5 per square foot of your home office up to 300 square feet, giving the method a $1,500 cap.
Cash App Taxes (formerly Credit Karma Tax)
Business owners and freelancers (including contractors) receiving a 1099 form for the income they earn may be able to deduct expenses related to having a home office. But for a space to qualify for a deduction, it has to be used exclusively for business purposes. You can’t just claim a deduction for your fancy new kitchen table by putting your work laptop on it.
Google+
+ There are no comments
Add yours