J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

19.13 Employee Home Office Deductions

The tax law has been drafted to prevent most employees from deducting the expenses of an office at a home. Even if an employee should meet one of the tests for deducting home office expenses (40.12), such as doing administrative work at home, the employee must also show that the home office was required for the “convenience of his or her employer” in order to claim the deduction. Telecommuters who are required to work at home satisfy the employer convenience test but if an employee requests telecommuting and the employer has on-premises office space available, the IRS is likely to argue, barring unusual facts, that the home office is for the employee’s convenience and not for the employer’s convenience. The IRS has not provided specific guidelines for telecommuters.

Even if the deduction tests can be met, the allowable office expenses (other than mortgage interest and taxes) are subject to the 2% AGI floor on Schedule A; see IRS Publication 587 for reporting instructions.

EXAMPLE

Charlie, a teacher, has a small office at school where he can grade papers and tests, work on lesson plans, and meet with parents and students. The school does not require him to work at home, but he prefers to use the office he has set up in his home, and does not use the office the school provides. Although Charlie’s home office is used for the administrative duties of teaching, Charlie may not deduct his home office expenses because he does not meet the convenience ...