Important Tax Deductions for Telecommuters

Telecommuting is one of the fastest growing employment trends of the 21st Century. Whether you are an entrepreneur or employee, technology now allows many jobs to be performed efficiently and more cost-effectively from home. However, telecommuting is an adjustment from the usual 9-5 office job; not only are you working in a new environment, but you also need to understand the tax implications of work at home positions.

For those working out of a home office, more detailed bookkeeping is necessary to make sure you are in compliance with tax laws and taking advantage of the tax breaks available to you. Here are some the top tax deductions you may be able to access as a telecommuter:

Business Phone Lines: A phone line that is installed exclusively for business purposes may be tax deductible. Keep in mind that this cannot be the same line you use for residential calls. These days, many at-home workers have mobile phones for this purpose because they typically offer unlimited long distance plans.

Supplies and Equipment: Equipment and supplies purchased for use with your at home job or business may be deducted on your taxes. These include items such as computers, printers, fax machines, and office supplies such as paper and pens. Telecommuter Tax Tips

Vehicle Expenses: If you use your vehicle for business purposes, you are able to deduct vehicle-operating costs. Most will choose to take the mileage deduction, which is 56 cents per mile in 2014.

Travel Costs: Expenses for traveling out of town when it is job related can be fully or partially deducted, depending on which expense. Travel costs such as airfare, bus fare, train fare, and hotel stays are 100% deductible. Only 50% of meals and entertainment costs can be deducted.

Continuing Education: Many professions require that a certain number of hours of continuing education be met to maintain your credentials. Expenses related to obtaining this education can be deducted. However, be careful to make sure that the education you paid for is directly related to your work.

Home Office: You may claim the home office deduction as an entrepreneur if your home is your “principle place of business.” As a telecommuting employee, you may also claim this deduction if your employer has asked you to work out of your home for their convenience. In 2013, this deduction was simplified and you no longer need to calculate a percentage of your mortgage/rent, utilities, etc. Now you have the option to simply take the number of square feet used as your home office (up to 300) and multiply it by $5 to arrive at your deduction amount.

There are several other deductions that may apply to you if you are a telecommuter or operate a business out of your home. Speak to a professional accountant about any and all work at home deductions you can take advantage of to reduce your tax burden.

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