Trends among workers, REALTORS®, and an easier way to claim a tax deduction
The American Time Use survey shows that just over 1 in 5 (21.3 percent) of employed persons who worked on an average day worked from home, and worked on average 2.88 hours at home.
The Treasury recently announced good news for some of these workers who may qualify for the home office tax deduction: a new, simpler option for calculating the home office tax deduction that should increase the number of Americans taking advantage of the deduction and decrease taxpayer preparation time. Instead of the 43-line form required before, qualified taxpayers can deduct $5 per square foot of home office space up to 300 square feet. It’s not available right away. This option will be available starting in tax year 2013, and most taxpayers will file this return in early 2014.
This is especially good news for Realtors®. A 2010 Survey of members of the National Association of Realtors® shows that more than seven in ten members maintained a home office. Further, while agents are certainly not tax advisors, they are in a unique position that enables them to monitor trends in the sale of homes with offices and may have opportunities to inform clients of this potentially valuable tax deduction. Not all home offices will meet the criteria for the tax deduction. For details on qualifying in the current tax year, visit this link.
The American Time Use Survey had some other insight on those who work from home. A few points to take away are:
- The self-employed are more likely to work from home than wage and salary workers though working from home is growing among wage and salary workers.
- Higher earning individuals are more likely to work from home and work longer hours at home.
- Those in professional occupations are more likely to work from home.
- More educated workers are more likely to work from home.
For more information, check out this full PPT slidedeck.