I work from home, can I write off some rent?

Question

Hi, I am NOT self employeed, I work for a very large company, but my office is in my house(I rent) can I write off the sq footage of my office % of my rent? And for that matter could I write of a % of electric, water, gas , cable?

It is required by my job, and it is a dedicated room

Answer 1

The IRS is cracking down on home office deductions. I'm not sure if as an employee your home office would be deductible.

Basically, the deduction would be the percentage of the rent you pay that equals the percentage of the home that is dedicated as an office. (If you pay $1,000 rent and the office is 25% of your home, you could deduct $250.) Plus there would be some percentage of utilities.

But speak to a tax professional for the latest rules. I take the H/O deduction, but I have an accountant do it for me, so I'm not sure how the regs have changed.

Here's a good explanatory list of possible deductions:

http://www.irs.gov/taxtopics/tc500.html

Answer 2

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Answer 3

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Answer 4

I don't think you can write off rent---your home is not your primary place of business, but secondary. If you were self-employed you could have been able to do so.

All the other stuff is going to be difficult to write off because you're an employee. Your employee should be able to give you an allowance for cable internet/internet services and electrical services or your employer should reimburse a percentage of that to you.

This is the problem with being an employee, there's not a whole lot you can deduct. If you were under contract as an outsourcee, then, you would be working for yourself,but under contract with your employer and you would have written off a majority of that stuff. This is why I enjoy working for myself: you write off business/work expenses, then pay taxes. An employee must first pay taxes, then use whatever is left for work/business expenses.

Even so, employees do not get a lot of things a work or a business write off; instead, their bosses/employers do. You should look into being your own boss/being a consultant or contractor or outsourcee.

Answer 5

YES, one of the previous answers also gave you a reference to a government release for office in home deductions that you should follow carefully. Note that as an employee you are being directed to use the deduction on Schedule A for itemized deductions because you are not reimbursed directly for the use of the home office. If you can negotiate a reclassification of some of your earnings (wages) to a reimbursement - which is difficult with large companies - you would be better off and you could show the company they are not paying you any more than they presently do.

Answer 6

I know nothing about Canadian tax law. Here in the USA, the regulations regarding deductions for home offices require that the space involved is used only for the business. If you store personal things in the room, or sleep there, then you cannot use it as a basis for your deduction. Returns with home-office deductions are audited more frequently that returns without. I have a spare bedroom with a desk and no bed in it that I use for an office. I don't bother with the deduction, because it's more trouble than it's worth.

Answer 7

It would not be off your rent; it would be a tax deduction. You still need to pay rent. Also the room has to be used solely for your business- no other purpose.

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