Seems simple, right? You started working from home so why not claim a tax break for your own home office?
It’s not that easy, according to Kiplinger. Business-related expenses are different than the home office deduction, and the Internal Revenue Service has very specific rules for filers who wish to take advantage of these deductions.
A full-time employee (those who receive a W-2 form) who works from home will not be able to deduct expenses.
If you paid for office furniture of other supplies to put together a usable office at home, those expenses are also not tax-deductible, according to USA Today. Ask employers for reimbursement or stipends for supplies.
Self-employed filers, such as freelancers, consultants and other workers, are eligible for the home office deduction if the home office is a completely dedicated space. Your dining room table won’t count.
If you do follow the rules for dedicated spaces, the home office deduction can provide a nice savings. If your dedicated office space is 15 percent of the total square footage of your home, you can deduct 15 percent of direct and indirect costs, such as utilities or repairs.
Nice surprise! Stimulus doesn’t count as income
Tax free money? Is that even possible? It seems so with stimulus checks.
Stimulus payments are not considered taxable income and will not be subject to income taxes, according to the IRS.
More than half of Americans don’t know that stimulus payments are non-taxable, a statistic that reflects the widespread confusion surrounding this year’s tax season, according to Forbes.
No stimulus check?
Individuals who never received economic impact payments can request a Recovery Rebate Credit. According to CNET, millions of Americans never got the first or second stimulus checks, possibly due to IRS error or missing money for dependents. Tax non-filers, such as SSI or SSDI recipients, were also more likely to miss their payments.
To request your rebate, simply claim your full stimulus check amount as a Recovery Rebate Credit on your tax return. According to CNET, this credit combines stimulus money with your tax return, so you could receive a larger tax refund as a result or reduce your tax bill. Outstanding debts such as overdue child support payments could be deducted.