If telecommuting becomes the norm, will the tax code have to change?

[Dr. Who]

If a significant proportion of the workforce switch to working from home, will the tax code have to consider allowing employees to write off their home office space, internet, phone and other office equipment/supplies costs?

If someone works from home on a permanent basis, they likely need dedicated office space and equipment in their homes. If an employer can otherwise deduct these expenses as the cost of doing business, shouldn't employees have the same option, if they are now footing the bill?

[Admiral Ackbar]

It is already starting in the PRC. Peoples Republic of California to be clear they already want to raise the gas taxes. Why? well although in theory it is their socialist dream that people drive less and use less gas, the shocking reality is that less miles driven = less gas purchased= less tax money for the socialist government of the state to move over to illegal aliens.

Interesting how that works.. More things like this will be coming

https://reason.com/2020/06/15/in-the...ents-a-gallon/

[Newpublius]

If a significant proportion of the workforce switch to working from home, will the tax code have to consider allowing employees to write off their home office space, internet, phone and other office equipment/supplies costs?

If someone works from home on a permanent basis, they likely need dedicated office space and equipment in their homes. If an employer can otherwise deduct these expenses as the cost of doing business, shouldn't employees have the same option, if they are now footing the bill?

The home office deduction already exists of course. I'm kind've looking at this like commuting. Right now if you commute to a W2 position your ordinary commute is NOT deductible. If you're 1099, the cost of the commute IS deductible. Likewise for home office expense.

Remember the W2 employee gets the employer to pay half of social security.

The reason why I don't think they will do it is because the home office deduction is currently a major audit flag. Subject to too much abuse.

[Newpublius]

It is already starting in the PRC. Peoples Republic of California to be clear they already want to raise the gas taxes. Why? well although in theory it is their socialist dream that people drive less and use less gas, the shocking reality is that less miles driven = less gas purchased= less tax money for the socialist government of the state to move over to illegal aliens.

Interesting how that works.. More things like this will be coming

https://reason.com/2020/06/15/in-the...ents-a-gallon/

Take mass transit! Oh, right, snap!

[Dr. Who]

The home office deduction already exists of course. I'm kind've looking at this like commuting. Right now if you commute to a W2 position your ordinary commute is NOT deductible. If you're 1099, the cost of the commute IS deductible. Likewise for home office expense.

Remember the W2 employee gets the employer to pay half of social security.

The reason why I don't think they will do it is because the home office deduction is currently a major audit flag. Subject to too much abuse.

To clarify, it is deductible if you are a contractor (1099), but not an employee (W2).

I don't think that social security should make a difference in terms of the employee's cost of doing business. I would see it as a perk - besides, it's just something else that the employer writes off.

It may be an audit flag, but that isn't a justifiable reason i.e. difficulty in policing it. If a significant proportion of the cost of office space per se, is transferred to employees, shouldn't the same tax logic apply? Alternatively, should an employer be paying each employee a supplement to cover their office expenses?

[DGUtley]

Also, the local tax collector will want its cut

[Peter1469]

With the increased standard deduction, I doubt the home office expenses will be useful to most people.

[Newpublius]

To clarify, it is deductible if you are a contractor (1099), but not an employee (W2).

Yes, I routinely take the deduction. I have W2s, 1099s and an LLC. I happen to take it under the LLC, but it doesn't matter, I could do it under the 1099s I get.

I don't think that social security should make a difference in terms of the employee's cost of doing business.

In GENERAL, W2 is preferred to 1099. Let's just say that you said to me, January 1st, and assuming NO OTHER income. I have two choices:

W2 employment for $100k and I can't deduct my commute or my home office (they seem mutually exclusive, but they're not actually)

OR 1099 employment at $100k where I CAN deduct my commute AND my home office expense (pre-pandemic thats more normal, but lets ASSUME you get both, obviously right now one wouldn't be ACTUALLY commuting).

I would take the W2 every time because of self employment tax.

I would see it as a perk - besides, it's just something else that the employer writes off.

Remember a write off is a deduction, a legitimate business expense. If an employer has an office that you go to and the employer leases that space, then the employer is paying the lease and the lease is legitimately deductible before taxes are paid on profit.

In this case here, your commute and your home office expense are deductible BY YOU, BECAUSE the employer ISN'T paying those expenses. Let's assume that your employer bought you a car and gave you money for gas because in addition to commuting, say you are in traveling sales. Ok, the employer can deduct that.

Now, for sure, if the employer says to you, "We will reimburse you for home office expenses like computer, printer, ink, electricity, air conditioning, heat, etc." Well, then sure the employer can deduct that, but then YOU CAN'T.

It may be an audit flag, but that isn't a justifiable reason i.e. difficulty in policing it.

Its why they don't let you deduct your commute. You have a Camry, I have a Corolla, I buy gas at $2, you buy it as $2.10. You drive x miles to work, I drive y miles to work. Maybe I am taking the free bus to work and just claiming the mileage anyway.

Suddenly, people have 58" "computer monitors" --- $3000 leather sofas which they say are office chairs for meetings.

If a significant proportion of the cost of office space per se, is transferred to employees, shouldn't the same tax logic apply?

For most the cost of the home office is a sunk cost. Its being paid for even if you're not at the house. Right now, I am working from home. To a certain extent, there are some MINOR costs involved that I pay BECAUSE I work from home and don't go to the office. But I also save FAR more than I spend. This isn't a situation where I go to my, now current, W2 employer and say, "Hey, listen, this working from home thing is really putting me out a couple of shekels. Please reimburse me" -- I don't commute, pay for child care, etc. Sure, the air conditioning is a little bit more (South FL), when I left the house I would turn the thermostat up while we weren't there, right? But that's about it.....I would even leave the computers on.

Alternatively, should an employer be paying each employee a supplement to cover their office expenses?

That's between you and your employer of course. Honestly I would take LESS money to continue to do this in perpetuity. Its that much better. There's no commute, so I get to sleep in until I roll out of bed at 730a and logon, as opposed to waking up at 555A, getting ready, getting the kids up, getting them ready, driving 1/2 hour to 50 minutes to an office. All of the things I did before commuting, I now do during the work day. I unabashedly shower, do the dishes, do the laundry.....

I already have the space, I already have the computer, I already pay for the internet connection, I'm already paying for all of these things, so honestly I'd be hard pressed to go to my employer and say, "Listen, you need to reimburse me for expenses I was paying before everything went remote, that I am continuing to pay now that we are remote, and which I will continue to pay even if we return to offices"

Now that being said if you have some unusual expense that you think its fair for the employer to reimburse, by all means, I'm not opposed to you negotiating that with your employer.....hell no....

[Newpublius]

With the increased standard deduction, I doubt the home office expenses will be useful to most people.

With an LLC you do it on Schedule C. The income from there flows onto your return and then you could theoretically take the standard deduction from there or you can itemize if that's better.

[Common]

If a significant proportion of the workforce switch to working from home, will the tax code have to consider allowing employees to write off their home office space, internet, phone and other office equipment/supplies costs?

If someone works from home on a permanent basis, they likely need dedicated office space and equipment in their homes. If an employer can otherwise deduct these expenses as the cost of doing business, shouldn't employees have the same option, if they are now footing the bill?

Doubtful, heres why, employers will give stipends to their employees for those costs and keep taking the tax deduction for themselves..

My one daughter who is an executive who is now working from home and gets a stipend for her costs