Tax Tips for Remote Workers: What You Can and Can't Deduct in 2024

Key Takeaways

• Remote and Hybrid Work: Even though remote work remains popular in 2024, employees are unable to deduct home office expenses as they could before.
• Tax Cuts and Jobs Act: This act eliminated the ability for remote employees to deduct home office expenses until at least 2025.
• Reimbursement Options: Despite the lack of deductions, many companies provide tax-free reimbursements for home office expenses.

As tax season approaches, many remote workers are looking for ways to minimize their tax liabilities, especially those who have spent significant amounts on their home offices in 2024.

Remote and hybrid work continues to thrive, with over one-third of workers still fully remote or hybrid, according to Owl Lab's State of Hybrid Work report.

However, remote workers cannot deduct costs like increased electricity bills or new office furniture from their taxes. The Tax Cuts and Jobs Act, enacted in 2018, broadly removed the ability for remote employees to claim such deductions, a policy expected to last until 2025, unless further legislative changes are made.

Remote Workers Still Have Options to Recoup Home Office Expenses

While direct deductions are off the table, remote workers can still request tax-free reimbursements from their employers. In fact, 56% of companies offered reimbursement for work-related expenses in 2024, according to the Society for Human Resource Management.

Although federal law does not mandate these reimbursements, 11 states require companies to compensate employees for necessary expenses. If a company has an accountable plan, reimbursements become tax-free, provided employees submit necessary documentation.

Taxpayers should carefully review their company's reimbursement policy and employment contract. Remember, if the employer reimburses for home office items, those items technically belong to the employer. This raises questions about ownership if an employee leaves the company.