What to deduct for your home office
Different deductions for federal and state taxes
Many Californian employees have been forced to work from home due to the pandemic. Unfortunately, the federal government will not give employees any deductions for your home office. However, you can still claim this deduction on California tax returns.
If you are self-employed, you can claim a deduction on both your state and federal tax return. Here’s how it works: A portion of your household expenses can be deducted because you use your part of your home exclusively for work.
You may be able to deduct a portion of the following expenses:
- Rent or Mortgage Interest
- Real Estate Taxes
- Property or Renters Insurance
- General Repairs and Maintenance
- Gas, Electric, Internet and Other Utilities
- Housekeeper or Gardener
All of these expenses are prorated by the portion of your home that you use exclusively and regularly for work. If you purchase an item for use in your home-office, you can usually deduct the entire amount paid. So, if you need a desk and chair for work, that may reduce your California taxes. If you have your carpets cleaned in your whole house, only a percentage may be deducted for the office in your home.
Most tax professionals will flat tell you employees can no longer deduct an office in your home. Taking a deduction on your California tax return is an often-overlooked deduction that may save you money on taxes. This deduction does not work for everyone, but give us a call to see if it will save you money.
Call (619) 260-1955 or email us for your free consultation, or to arrange your virtual tax preparation appointment.
