Working From Home Does Not Give A Taxpayer An Automatic Tax Break, Experts Say

PITTSBURGH (KDKA) -- Millions of Americans worked from home during part or perhaps all of 2021 and are wondering if they can get a tax break for business expenses working at home.

It's not a simple question to answer.

"A lot of people during the pandemic were not comfortable meeting in person so we would do these Zoom meetings, FaceTime meetings," said Jim Martin, a local mortgage broker.

Martin is usually out in the field meeting those applying for home mortgages, but for much of the pandemic, he's been working out of his home office. Can he deduct the expense of a home office?

"As with every tax question you ask me, the best response is, it depends," said Prof. Bryan Menk, a tax expert at Duquesne University.

Menk said the first question really is, are you self-employed or are you an hourly or salaried employee with a W-2 from your company?

If you get a W-2, Menk said, "in general, you do not get to take any deduction for unreimbursed job expenses, including your home office expense."

"There is a lot of confusion," said Christopher Cuddy, a certified public accountant.

Cuddy, who gets a lot of questions about this from his clients, said most people cannot deduct unreimbursed business expenses, including their home office, unless they are self-employed.

"Most of those people can deduct the expenses that are occurring through their home office," Cuddy told KDKA money editor Jon Delano.

Martin is both self-employed and a company employee with a W-2.

"We just came to the conclusion that from the small gains you would get in the taxes, just to let it go. So I do not deduct," Martin said.

If you are an hourly or salaried worker who gets a W-2 form every January from your employer, it's pretty straightforward: You cannot deduct any unreimbursed business expenses even if your employer makes you work from home.

There is an exception for teachers who can deduct up to $250 in unreimbursed expenses.

So who can deduct their home office and related expenses? Only those who are self-employed, tax experts said.

And in that case, the home office must be used exclusively for business. You can't claim your dining room, for example, if you both work and eat in that room.

If you do it wrong, you run a risk.

"When you look at a home office deduction, if it's not claimed properly, it is an open invitation for the IRS to come in and audit you," Menk said.