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THE TRANSATLANTIC MAGAZINE

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1040 Abroad

IRS Reminds Americans of Home Office Tax Deductions

With more people working remotely, the IRS is reminding US Taxpayers that they may be eligible for home office deductions

Published on September 24, 2020

Home Office Photo: Ekaterina Bolovtsova

As part of Small Business Week in the US (Sept 22 to 24), the IRS is reminding Americans that they may be eligible for a home office tax deduction.

The home office tax deduction is available to "qualifying self-employed taxpayers, independent contractors and those working in the gig economy", although the IRS confirm that the Tax and Jobs Act "suspended the business use of home deduction from 2018 through 2025 for employees. Employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction, even if they are currently working from home".

Katelynn Minott, of US expat tax firm Bright!Tax, explained that although "very few expats need to claim the Home Office Deduction due to their ability to claim the Foreign Tax Credit or Foreign Earned Income Exclusion, it is a good option for those whom it might benefit. This might mean a self-employed higher earner who resides in a country with lower income tax rates than the US."

For more information on the home office tax deduction, Bright!Tax has a web page from 2018 explaining the deduction - see brighttax.com/blog/the-irs-home-office-deduction-for-us-expats-what-you-need-to-know.

To find out the latest rules on the home office deduction as they currently apply, go to the IRS website at www.irs.gov/newsroom/irs-reminds-taxpayers-of-the-home-office-deduction-rules-during-small-business-week.

If you need further advice or insights on US Tax and how the regulations apply to your situation, you can find US Tax Experts listed in our A-List Directory.

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