In a recent interview, top business attorney Senen Garcia, managing partner at SG Law Group in Miami, FL, revealed the key points to keep in mind for home office deductions during COVID-19. —
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When asked for a comment, he said, "The coronavirus pandemic has affected nearly all aspects of our lives, including how we work, with many now working remotely from home. This has led many to wonder whether or not they can claim home office tax benefits. If you find yourself in this situation, here's what you need to know."
The first thing to know, according to Garcia, is that employees of companies are not able to deduct home office expenses. However, these deductions are available for anyone who is self-employed.
"Individuals who are self-employed and work from home can take a home office deduction. To do this, you'll need to list your direct expenses, which are fully deductible. Direct home office expenses are anything that has to do with the actual workspace,” he said.
Garcia was quick to add that direct expenses include any repairs that have been done to the home office.
"In addition to direct expenses, anyone wishing to claim the home office deduction should also calculate their indirect expenses, which are only partially deductible and relate to the house in which the home office is in. Examples of indirect expenses include mortgage interest and utilities such as electricity and water," he said.
"To calculate the rate for your indirect expenses, divide the square footage of your office by the total square footage of your house. You should then multiply this rate by all your indirect expenses to find out this portion of your home office deduction."
According to Garcia, the way to determine the total for remote home office deductions is by adding direct expenses to the calculated indirect expenses.
“If you have any questions about what qualifies as a direct or indirect expense for home office deductions or how to do the calculations correctly, then the best thing to do is to get in touch with a professional," he said.
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