Question
Which taxpayer may be able to deduct home office expenses?
Rusty is an employee of ABC Corporation. He works remotely from home three days a week.
Carrie, a self-employed architect, uses part of her home for business. She uses it regularly and exclusively to meet with clients.
Norman is self-employed as a real estate agent. His office is away from his home but he uses his home occasionally for business.
Mariah uses an extra room in her home for business purposes. Her children also use the space to do their homework and play video games
Rusty is an employee of ABC Corporation. He works remotely from home three days a week.
Carrie, a self-employed architect, uses part of her home for business. She uses it regularly and exclusively to meet with clients.
Norman is self-employed as a real estate agent. His office is away from his home but he uses his home occasionally for business.
Mariah uses an extra room in her home for business purposes. Her children also use the space to do their homework and play video games
Answers
GPT-4o mini
To determine who may be able to deduct home office expenses, we need to look at the IRS criteria for what qualifies as a home office. The two primary requirements are that the space must be used **exclusively** and **regularly** for business purposes.
Let's analyze each taxpayer:
1. **Rusty (Employee of ABC Corporation)**: Rusty works remotely from home three days a week. However, as an employee, he generally cannot deduct home office expenses because the home office must be for the convenience of the employer, and employees have limited ability to deduct unreimbursed business expenses post-Tax Cuts and Jobs Act (TCJA). Therefore, Rusty cannot deduct home office expenses.
2. **Carrie (Self-employed architect)**: Carrie uses part of her home exclusively and regularly to meet with clients. Since she is self-employed and meets both the exclusivity and regularity requirements, she can deduct home office expenses.
3. **Norman (Self-employed real estate agent)**: Norman uses his home occasionally for business. Since he does not use a part of his home exclusively for business purposes on a regular basis, he does not meet the criteria needed for deducting home office expenses.
4. **Mariah (Uses an extra room for business)**: Mariah uses an extra room in her home for business, but her children also use the space for homework and play. The exclusivity test is not met because the space is not used exclusively for business. Therefore, Mariah cannot deduct home office expenses.
In summary, **only Carrie** may be able to deduct home office expenses under the current IRS rules.
Let's analyze each taxpayer:
1. **Rusty (Employee of ABC Corporation)**: Rusty works remotely from home three days a week. However, as an employee, he generally cannot deduct home office expenses because the home office must be for the convenience of the employer, and employees have limited ability to deduct unreimbursed business expenses post-Tax Cuts and Jobs Act (TCJA). Therefore, Rusty cannot deduct home office expenses.
2. **Carrie (Self-employed architect)**: Carrie uses part of her home exclusively and regularly to meet with clients. Since she is self-employed and meets both the exclusivity and regularity requirements, she can deduct home office expenses.
3. **Norman (Self-employed real estate agent)**: Norman uses his home occasionally for business. Since he does not use a part of his home exclusively for business purposes on a regular basis, he does not meet the criteria needed for deducting home office expenses.
4. **Mariah (Uses an extra room for business)**: Mariah uses an extra room in her home for business, but her children also use the space for homework and play. The exclusivity test is not met because the space is not used exclusively for business. Therefore, Mariah cannot deduct home office expenses.
In summary, **only Carrie** may be able to deduct home office expenses under the current IRS rules.