- You may deduct your home office expenses and incidental fees, including telephone service charges, utility fees and business equipment if you are an employee. As an employee, you deduct your qualified employment-related expenses on your Schedule A of IRS Form 1040. Your qualified employment-related expenses must exceed 2 percent of your adjusted gross income. If your qualified expenses do not exceed 2 percent of your income, you cannot deduct them. However, in addition to deducting home office use and business equipment costs, you may also deduct a portion of your mortgage interest, rental costs and real estate taxes if you are self-employed, or if you are an independent contractor. As a business owner or independent contractor, the IRS does not require you to meet the 2 percent adjusted gross income requirement.
- As an employee, you can deduct the expenses associated with working from home if your employer requires you to work from home and your employer does not reimburse you for your out-of-pocket expenses. If your employer reimburses you, you may deduct your non-reimbursed home office expenses to the extent they exceed 2 percent of your adjusted gross income. Generally, you can deduct the costs associated with working from home if your employer derives a benefit you working at home. If you work from home solely for your own convenience pursuant to a flexible telecommuting policy, you may not deduct your expenses. However, if your employer offers you the option to work from home and your employer derives a benefit by using your cubicle for another employee, you can deduct your home office expenses.
- Other allowable miscellaneous deductions the IRS considers job-related expenses are uniform costs, non-reimbursed travel expenses and non-reimbursed educational or training costs. If you incurred any of these expenses and your employer did not reimburse you for your expenses, you may add them to your Line 38 list of expenses on your IRS Form 1040. You can include any non-reimbursed travel expenses if you were required to travel away from your normal place of business, and you may be able to deduct mileage, lodging and meals. You can deduct job training and educational expenses if your employer required them and did not reimburse you.
- If you are self-employed, you must deduct your home office expenses as business-related expenses on Line 30 of Schedule C, Profit or Loss From Business. You may use Form 8829, Expenses for Business Use of Your Home, to help you calculate your allowable home office deduction. Generally, the IRS allows you to deduct the actual physical use of your home as a home office deduction if you use your home as a place to meet with employees or clients or use your home as your principal business location.
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