Why your 2018 taxes are different if you work from home

Why your 2018 taxes are different if you work from home Why your 2018 taxes are different if you work from home Deciding to work from home is a significant financial decision. Those who work from home cut back on commuter costs, but building a home office comes with a solid price tag. When tax season rolls around, there’s a whole other list of considerations, and the 2018 tax season hit some people with a major adjustment.The Tax Cuts and Jobs Act of 2017 changed how some employees who work from home file taxes for tax years 2018 through 2025.Follow Ladders on Flipboard!Follow Ladders’ magazines on Flipboard covering Happiness, Productivity, Job Satisfaction, Neuroscience, and more!The Home office deductionWhile salaried employees were once able to file unreimbursed employee expenses as a deductible, that perk only existed for tax years prior to 2018, according to Brian Ashcraft, the director of customer experience at Liberty Tax.Telecommuters that dedicated an area of space in their homes exclusively for work purposes, and worked from home for the convenience of their employer, were previ ously able to deduct a portion of home-related expenses. Some of these expenses included mortgage interest, property taxes, homeowners insurance, and utilities. Employees could also claim work-related trips, professional dues, and equipment used for work.Tax reforms eliminated the ability to claim miscellaneous itemized deductions, which took away any area for employees to claim home office expenses. Now those expenses fall completely on the employee unless the employer agrees to fund them.What this means for the 2018 tax year if you work from homeThe inability to claim these expenses means that refunds for the 2018 tax year could be smaller, or could even become “balances due” for employees with unreimbursed business expenses,  according to Nathan Rigney, the Lead Tax Research Analyst at the Tax Institute at  HR Block.  In addition, those who deducted unreimbursed business expenses for 2017 are actually at risk of owing this tax season. These  unreimbursed business expenses  ca n be especially considered for certain workers, such as truckers or those who travel for work.“Employees who are no longer able to take the home office deduction, and didn’t like what happened with their refund this year, can make sure it doesn’t happen again next year by updating withholding with their employer,” Rigney said.Who can still claim unreimbursed employee expenses?The good news is that those self-employed workers, freelancers, and independent contractors can still claim these deductions. In addition, Form 2106 is available to be filed by any person who falls into one of these categories:  Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses.You might also enjoy… New neuroscience reveals 4 rituals that will make you happy Strangers know your social class in the first seven words you say, study finds 10 lessons from Benjamin Franklin’s daily schedule that will double your productivity The worst mistakes you can make in an interview, according to 12 CEOs 10 habits of mentally strong people