Employees and employers doing remote jobs from home represent a growing segment of the workforce. According to research, 3.9 million employees (2.9 percent of the total US workforce) work from home at least half the time, an increase of 115 percent since 2005. Remote employees may qualify for certain Home office tax deductions that are not available on-site employees. So now we will talk about tax deductions for remote employees.
Remote work at home
If you qualify for a home office tax deduction, you can deduct the actual portion of your home that is used for business. The most accurate method is to measure and divide square footage of your home office across the entire area of your home. For example, if your home office is 150 square feet and the total area of your home is 1,000 square feet, you can deduct 15 percent of your rent. If you own your home, it depreciates the business area of your home.
1- Automatic deduction of costs
If you are an employee or an entrepreneur, if you drive your car for business purposes, you are more likely to make a deduction. An example of this is a salesperson driving to a customer’s workplace. The other option is to list your expenses. Start with a depreciation deduction on the cost of your car, then add operating and maintenance costs like gas, oil, repairs, insurance premiums, tires, tolls, parking fees, and registration fees.
2- Remove advertising and promotion
Depending on your type of job or business. You may have costs associated with promoting and advertising your products or services. Which are also tax deductible. For example if you print a company brochure provide free product samples. Or hire someone to send a newsletter to customers you can deduct the cost of these items. You leave up to a $ 25 deduction for business gifts you give individual customers a year like a Christmas fruit basket. And don’t miss the deduction for your monthly internet service business cards and postage.
Whether you’re an entrepreneur starting a home business or working remotely for another business outside of your home, considering home office tax deductions can save you money on filing your taxes.
3- Using a personal vehicle for work
If the type of work you do requires you to move between different locations on a regular basis, you can deduct your vehicle costs. Deductions on vehicle costs may include:
- Fuel costs
- Maintenance (repairs, oil changes, tires, etc.
- And parking
If your employer does not reimburse you for these costs, there are no restrictions on the rates you can deduct. There is an administrative restriction, however, the mileage book. Your mileage book should show a detailed record of your business trips and miles. If you don’t keep a record, you can deny the costs you are claiming and a $ 200 fine.
We live in a blessed moment when the Internet exists and the media makes it much easier than ever. For example, many employers require their employees to maintain an office outside of the employer’s office. And some of these costs are deductible:
- Utilities indoors: You can deduct part of the rent, electricity, heating. To do this, you must calculate the portion occupied for commercial purposes against the total area. For example, if the room in which your office is located is 100 units and your entire house has 1000 units. You can include 10 percent of your expenses on your tax return.
Telephone, internet: Unfortunately, the tax authorities do not consider these costs to be eligible if you use your residency package. However, if you use your mobile phone, you can deduct the part used for business, including the data.
Computer, phone and other equipment: No matter how absurd it is, buying any material is not eligible for your expenses, however, rent is.
5- Other suitable costs
Travel expenses: If you have to move out of the municipality where your employer operates, you can deduct certain costs, such as the costs of transportation (plane, train), meals and accommodation (hotel, Airbnb, motel) if your absence extends even more than 12 hours
Supplies: Any type of supplies that cater directly to you for income is deductible, such as stationery, stamps, pens, ink cartridges.
GST / QST: If your employer is registered for GST / QST, you have the right to claim a refund of taxes paid on your expenses. Make sure your employer puts your tax numbers on your employment expense forms.
Before you go, I hope this article tax deductions for remote employees is helpful for you.