With many people working from home in the past year, many might be hoping for a little extra relief come tax time.
Printer paper, ink, cell phone usage and a more comfortable desk chair might all have been ‘extra expenses’ this year, but you’ll likely see little relief on your tax bill.
Glynn Murphy, a Scranton certified public accountant said people might be surprised that they can’t really claim much at all – if anything.
“The feds did away with employee business expenses back in 2018,” he said. “It was a transition for a lot of people who had endured these business expenses and it was a lesson for a lot of people who had these expenses too because they should have cut a better deal with their employer at the beginning of 2018.”
He said the federal government has not changed any laws to allow for the including of business expenses in the coming year.
“If you’re working from home and not getting compensated for the use of your cell phone, Internet, utilities and your own computers and technology, you should talk with your employer,” he said.
People who are self-employed can continue to claim deductions much like they have been in the past – that includes those who do contract or freelance work.
It’s people who are working for someone else who are stuck, said Murphy.
“You won’t get anything from the federal government,” he said adding that it’s best to talk with your accountant about getting a small break from your local or the state government. However, Murphy said on your local taxes, you could get a break, but it’s not much.
“If you spent $1,000 on business expenses you lived in Taylor, you’d get $10 back,” he said.
The Tax Cuts and Jobs Act, passed and signed into law in 2017, was the largest overhaul of the federal tax code in three decades. The legislation dropped the corporate tax rate to 21% in what are commonly now known as the ‘Trump Tax Cuts,’ which expire in 2025. Before the legislation was passed, people could take itemized deductions for personal business expenses that were not covered by an employer – things like mileage and cellphones.
Neil Trama, a Scranton certified public accountant said the move could catch a lot of people by surprise come tax time.
“This was in the tax law last year, but a lot people weren’t working from home and they weren’t aware of it,” he said.
Trama said it’s likely that Congress will have to go back and re-examine the law.
“It’s possible,” he said. “There always used to be a deduction and they may have to look at this going forward.”
It’s unclear what could happen when the new Congress takes shape in 2021. Several states have filed lawsuits over the original legislation writing that it violates the Constitution. Those lawsuits have not been settled.