How working from home could impact your tax return

How working from home could impact your tax return

How working from home could impact your tax return
Millions of Americans found themselves suddenly working from home last year. This meant that ordinary expenses like printer ink, electricity to power up your laptop and other expenses associated with your home office are coming out of your pocket. As tax season arrives, accountants are scrambling to find out whether these costs can be deductible.

Experts caution tax filers before claiming home office deductions. The federal tax code only allows home office deductions for those that are self-employed like freelancers, small-business owners and those who work for themselves. Further, the deduction only qualifies if the home office is used exclusively for the purposes of that self-employment, meaning if your home office is also your kitchen counter, don’t count on the deduction.

However, filers in California may find some relief on their state income tax return. The State allows remote workers to deduct a portion of rent, mortgage interest, utility bills like the internet and other office supplies. But there are limits and experts recommend those seeking these deductions consult with a professional first.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 2.75 percent and 15-year rates are near 2.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.