Due to the pandemic, many Americans worked from home or started a side gig in 2020.
But what impact will that have when filing your taxes?
Work from home took on a new meaning in 2020 but the IRS has strict guidelines on taking home office deductions.
"With the work from home scenario, a lot of people were thinking, oh, great, now I get to take advantage of that home office deduction. But if you're an employee where you're doing work for your employer, you are not able to take advantage of the home office deduction," said Kathy Pickering.
Only business owners, independent contractors, and self-employed workers are eligible and their office space has to meet certain requirements.
"It depends on whether or not you use your home or a portion of your home only for business and regularly," says Alejandra Castro.
People who own a business or work for themselves are eligible to deduct business expenses too.
"Business deductions, business expenses, all of those appropriate ordinary expenses that go into the generation of your business revenue. $5,000 and startup costs, marketing, advertising, rent, utilities, and equipment that you need to purchase," said Pickering.
And what about that side gig you pursued during the pandemic?
"People inadvertently got surprised by becoming self-employed and not understanding that the income you make in the side gig, you've now become your own boss, which means you are responsible for paying your own taxes," Pickering said.
The good news: Your side gig may qualify for those home office and business expense deductions.
