PHOENIX (3 On Your Side) - You bought the desk and a new webcam for your virtual video conference meetings. You may have even upgraded your internet service to make sure your connection is crystal clear.

Taxes

If you receive a W-2, there's no reason to save that stack of receipts you've been collecting for your business expenses.

It's not cheap to set up a temporary work-from-home office. But these things have to be a tax write-off, right? Wrong.

"If you're a W-2 employee, the answer to that is no," CPA Barbara Rohwedder explained. "Starting in 2018, the Tax Cuts and Jobs Act eliminated the unreimbursed employee business expense deduction."

That means if you receive a W-2, there's no reason to save that stack of receipts you've been collecting for your business expenses. It might feel like you're losing out on money, but Rohwedder says the vast majority of people actually aren't.

"With the elimination of that deduction, the standard deduction went up substantially," she said. "And in all honesty, most people didn't get to take advantage of that unreimbursed business employee expense because there's a floor, meaning you'd have to clear 2% of your adjusted gross income before you get to deduct any of it."

Here's the example. Before the Tax Cuts and Jobs Act, if you wanted to claim business expenses and you made $100,000 per year, you would have had to clear $2,000 in expenses before you could start claiming any of it.

"People thought they were getting a deduction. They were keeping all of their receipts, and they were giving them to their accountant, but chances are it never really penciled out and never really had an impact on the tax return," Rohwedder said.

For people who are self-employed, home offices and other out-of-pocket business expenses remain deductible. That did not change with the Tax Cuts and Jobs Act, Rohwedder added.

 

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