Submitted By: Ralph
Answered: September 28, 2015 12:25 pm

I am an employee who works exclusively from home. Can I take a home office deduction?

The home office deduction is allowed for both employees and self-employed individuals, with this difference: employees must use their home office for the convenience of the employer (not for personal preference). An employee who claims a home office deduction does not complete Form 8829 (that’s only for Schedule C filers); instead fill out the worksheet in IRS Publication 587. Then enter the deduction amount on Form 2106 (or 2106-EZ). Ultimately, the deduction is taken as a miscellaneous itemized deduction on Schedule A of Form 1040.

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Tax Glossary

Passive activity loss rules

Rules that limit the deduction of losses from passive activities to income from other passive activities. Passive activities include investment rental operations or businesses in which you do not materially participate.

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