States that Might Let You Write Off Home Office Expenses

states that might let you write off home office expenses

There are several tax reforms coming into effect this year affecting people who work from home. Many people will no longer be able to claim tax deductions to write off home office expenses. This is a huge concern now that more people are working remotely under quarantine. Spending more time at home means expenses will undoubtedly rise. If you had planned to claim those deductions on your next tax return, you should make sure you are still eligible for reimbursement.

Tax Cut and Jobs Act

The tax reforms recently passed in Congress will have a huge impact on the work force. This is especially relevant since many of us now work remotely. Furthermore, an online survey reported that nearly a third of respondents said they would like to continue doing so once restrictions are lifted. This means your average worker is spending more money towards business expenses each month.

In the past, you could itemize and deduct many of these expenses on your federal tax return. However, the Tax Cuts and Jobs Act has limited who is eligible. Now, only self-employed works can claim the deduction to receive the tax break. Those who are employed by someone else are no longer considered eligible for this reimbursement.

State Deductions for Home Office Expenses

The Tax Cuts and Jobs Act went into effect 2018, meaning these changes will affect your 2020 tax return. The most substantial change is that only self-employed tax payers can claim the tax write-offs for their home office. In addition, it also eliminates you from claiming “miscellaneous itemized deductions.”

The good news is that some states have not adopted the same guidelines for state tax returns. If you live in California, New York, Alabama, Arkansas, Hawaii, Minnesota or Pennsylvania, you may still receive some reimbursement. These states allow you to claim employee business expenses as a state tax deduction. While you may not receive a full reimbursement, at least some of these states are allowing some compensation.

What Qualifies for Home Office Tax Write-Offs

According to the IRS, you can deduct any cost associated with your home workspace. However, your home office must be exclusively and regularly used for business purposes. The tax code does not explicitly state what this covers, so self-employed workers operate on the honor system. Keep in mind you will have to justify these deductions if the IRS decides to audit you.

Some of the most common deductions deal with the space itself. This includes rent or mortgage interest, property taxes, homeowners insurance, and home depreciation. In addition, you can include a percentage of your utility bills each month. For example, if your office occupies 10% of your home, then you can claim 10% of your annual utilities costs. Also remember to add the cost for any computer equipment, home repairs, or furniture specifically associated with your home office.

Important Note

If you plan to write off home office expenses, there are a few things to remember. This deduction will only benefit you if you exceed the standard deduction for itemized deductions. This threshold varies state by state, so you will need to check your local tax laws to determine the amount. If you find these changes in the tax codes complicated and confusing, you are not alone. Contact a professional tax preparer with any questions to determine how these changes will affect you.

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Ways around Cancellation Fees to Save You Money

Ways Around Cancellation Fees

 

When making reservations, it is important to pay attention to prepayment and cancellation policies. If you need to make last minute changes, you could find yourself stuck with large penalty fees. Fortunately for all of you, I have a few tips when dealing with customer service. My time in the hospitality industry has taught me a few tricks that can save you time and money. Here are a few suggestions to help you find ways around cancellation fees.

Building Rapport

The first mistake people make when calling customer service is unleashing their frustrations on unsuspecting agents. The tone you set at the beginning of the phone call is a huge determining factor in the outcome of the call. Speaking from my own experience, I did the bare minimum for customers who started calls by screaming at me or blaming me for their troubles. It immediately put me on the defensive and attempt to end the call as soon as possible.

However, I was much more empathetic when a customer calmly explained their situation. I took the time to not only understand the problem, but also to find creative solutions. Often times, I would go the extra mile for these callers. Sometimes this meant finding loopholes to waive cancellation fees, seeking permission from a supervisor, or offering other forms of compensation of equal value. The life of a customer service representative is full of stress and undeserving anger, so remember that patience and kindness go a long way. It may be cliché, but you really do catch more flies with honey than with vinegar.

Courtesy Holds without a Credit Card

Another little known tip when making reservations is the courtesy hold. Some hotels and airlines will allow you to hold a rate for 24 to 48 hours without a credit card. This gives you enough time to shop around or discuss it with your travel partners. Just remember that you will have to call back and confirm the reservation with a credit card or risk cancellation. If you are not quite ready to commit, be sure to ask if this option is available. This little known option can buy you extra time without a deposit.

Changing the Dates to Avoid Cancellation Fees

This last option falls into a gray area, so you need to be careful what you say on recorded calls. Most reservations allow cancellations within 24 hours of arrival. However, if you find yourself inside this cancellation period, there is a loophole. Instead of cancelling your reservation and paying the associated fees, simply change the dates. This puts you outside the cancellation period, allowing you to call back and cancel with no penalties.

Although you are not technically breaking any rules, it is frowned upon by many companies. Most customer service agents are aware of this tactic, but cannot offer it to you because calls are monitored. You should also be aware this does not apply to prepaid rates that require full prepayment.

Final Recap

When making reservations, you should always be aware of cancellation policies and required deposits. You don’t want to find yourself in a situation where you are paying unnecessary penalty fees. However, if you do find yourself within a cancellation period, you have options. Most times you can get what you want by politely asking for it. The most important thing is to be kind and courteous. People are more willing to give you what you want when you remain calm and rational.

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