Can I deduct unreimbursed home office expenses as a W-2 employee working remotely?

I've been working 100% remote for the past year and have a completely dedicated room in my house that I use as a home office. Nobody else uses this space - it's strictly for work. I own the home, if that matters. I recently spent about $6,800 on some high-end computer equipment (dual monitors, ergonomic chair, standing desk, etc.) that seriously helps my productivity and has reduced my back pain. My company didn't reimburse any of it though - they basically said "we provide the laptop, everything else is on you." Two questions: 1. Can I deduct these expensive computer items that my employer wouldn't cover? They make my job way easier but weren't "required" according to HR. 2. Since I'm using an entire room exclusively for work, can I claim the home office deduction for that space? I know the tax laws changed a few years ago, but I'm confused about what applies to regular W-2 employees vs self-employed people. Thanks for any help! Tax season is coming up and I want to know if these expenses are worth tracking.

0 coins

18 comments

GalaxyGuardian

•8M

Unfortunately, the news isn't great for W-2 employees when it comes to home office deductions. The Tax Cuts and Jobs Act suspended the deduction for unreimbursed employee business expenses (including home office) for tax years 2018 through 2025. For your computer equipment question - if you're a W-2 employee (not self-employed), you generally cannot deduct those expenses even if they help you do your job better. The $6,800 you spent on monitors, chair, and desk would be considered unreimbursed employee expenses, which aren't currently deductible on federal taxes. As for the dedicated home office room - again, if you're a W-2 employee, you cannot take the home office deduction even if the space is used exclusively for work. This deduction is now only available to self-employed individuals, independent contractors, or those with side businesses.

0 coins

GalaxyGuardian

•8M

Even if your employer requires you to work from home, it doesn't change the current tax law for W-2 employees. The requirement to work remotely was a common question during the pandemic, but the IRS maintained their position that W-2 employees cannot take home office deductions regardless of whether working from home is optional or required by the employer. There's no exception for employees who are required to work remotely - the suspension of unreimbursed employee business expenses applies across the board for W-2 employees through 2025.

0 coins

Ethan Wilson

•8M

After going through a similar situation last year, I found that using taxr.ai (https://taxr.ai) was super helpful for figuring out what I could and couldn't deduct as a remote worker. Their system analyzed my situation and showed me alternatives since I couldn't deduct my home office as a W-2 employee. What surprised me was discovering that while federal taxes don't allow these deductions, some states actually do! The tool flagged that my state still permitted certain employee expense deductions that the federal return eliminated. It also suggested asking my employer about their "accountable plan" policy, which I never knew existed.

0 coins

Ethan Wilson

•8M

You upload your tax documents (W-2, past returns, etc.) and it analyzes them, then asks targeted questions based on what it finds in your specific documents. It's much more personalized than just going through generic questions. In my case, it identified that I had significant unreimbursed expenses based on my profession and suggested alternatives. It's different from standard tax software because it focuses specifically on finding deductions and credits you might miss. Traditional tax software is more about completing the forms correctly while taxr.ai is designed to find optimization opportunities. I still used my regular tax software, but with the strategies I learned from the analysis.

0 coins

Yuki Tanaka

•8M

Just wanted to update after trying taxr.ai from the suggestion above. It was actually super helpful for my situation! Even though I can't deduct my home office equipment as a W-2 employee (thanks, Tax Cuts and Jobs Act 🙄), the service showed me how to approach my employer about setting up an accountable plan for future expenses. It also identified that I qualify for a state tax deduction since my state still allows unreimbursed employee expenses! I had no idea about this. Apparently, not all states conformed to the federal changes. I'm getting back about $420 on my state return that I would have missed completely. Definitely worth checking out if you're in a similar work-from-home situation.

0 coins

Andre Laurent

•8M

If you're still trying to reach the IRS to ask about specific home office deduction questions, good luck with that! I tried calling for weeks about this exact issue. After 8 attempts and hours on hold, I finally used Claimyr (https://claimyr.com) and was actually able to speak with someone at the IRS within 15 minutes. They have this demo video that shows how it works: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone tree for you and call you when they get a human. The agent confirmed that while W-2 employees can't take the home office deduction federally, I should check my state tax laws since many states still allow it.

0 coins

Andre Laurent

•8M

Yes, it's a service specifically designed to navigate the IRS phone system and get you connected to a representative. I don't remember the exact cost since I used it months ago, but it was reasonable considering I had already wasted hours trying to get through myself. It works because they use technology to constantly dial and navigate the IRS phone system, then they call you when they reach a human representative. It's not magic - just smart automation of a tedious process. They can't guarantee instant access during peak times, but it's definitely faster than trying yourself.

0 coins

Zoe Kyriakidou

•8M

So I actually tried Claimyr after posting my skeptical comment. Honestly, I'm eating my words right now. I've been trying to get through to the IRS for THREE WEEKS about my home office question and getting nowhere. Used the service yesterday and got connected to an IRS agent in about 27 minutes (they estimated 30-40). The agent confirmed that while I can't deduct my home office expenses on my federal return as a W-2 employee, my state (California) does still allow some of these deductions. They also suggested I talk to my employer about an accountable plan for future expenses. Saved me from giving up and potentially missing out on state deductions. Sometimes it's worth admitting when you're wrong!

0 coins

Jamal Brown

•8M

One option you might have: ask your employer to set up an "accountable plan" to reimburse your home office expenses. Under an accountable plan, your employer can reimburse you tax-free, and they can deduct the expenses on their business taxes. It's a win-win. I got my company to do this after our office closed permanently. I submitted receipts for my chair, desk, and computer equipment, and they reimbursed me without it counting as taxable income. Worth asking your HR department if this is possible!

0 coins

Jamal Brown

•8M

The best approach is to frame it as a win-win for both you and the company. When you talk to HR, mention that accountable plans are recognized by the IRS and allow the company to deduct these business expenses while providing tax-free reimbursements to employees. For documentation, refer them to IRS Publication 463, which covers accountable plans. You could also point out that many companies are implementing these plans specifically for remote workers since the pandemic. I created a simple one-page proposal explaining the basic requirements: proper business connection, timely substantiation of expenses, and returning excess amounts. My HR was actually grateful since other employees had been asking about similar arrangements!

0 coins