Tel-working

[Bees Knees]

This is very interesting. I have employees who live and work on different islands and even on the Mainland. A one-way commute to my office would take between 4-10 hours depending upon the employee. So because some of my local employees come to my office every day my remote employees cannot, ever, under any circumstances, ever claim home office expenses?

The difference is you have two categories of employees. Local employees who have the same tax home as their place of residence, and out of town employees who live outside of the tax home (employers location). I did not imply that every employee working for the company has to be treated the same. I am talking about the same class of employee, and your situation clearly has two different classes of employees.

The point is, you can't have a situation where multiple employees of the same class can just willy nilly decide for themselves whether they choose to work at home or work in the office. It has to be for the convenience of the employer, not the employee.

[FEDUKE404]

Not whether but how

I don't disagree with the overall concept of taking OIH for tele-commuters in today's world, which is definitely a'changin' .

My confusion lies with what exactly you could (with a clear conscience as a tax preparer) show as an allowable office-in-home expense? First, you have to clear the employer "requirement" to have such expenses. . .not undoable but still difficult. Then you have to work within the very restrictive "regular and exclusive use" concept attached to any office in home space. Maybe a single person in a multi-room apartment can denote the unused bedroom as "my office," but a similar declaration might be somewhat difficult for a "family member" with a small home with many multi-purpose rooms. Then how do you play the expense game? What part of internet IS business? What computer costs can be properly used for "employee" use of, and justification for, said computer? Last time I checked, such computers at home would likely be listed property and that opens a can of (notably separate from exact OIH rules) worms for record-keeping of "business" use. And then after all of this is put through the blender, is there enough left over to clear the 2% hurdle for miscellaneous itemized deductions for an employee (I assume these folks are not making minimum wage)? We can save discussion of the long-term effects of depreciation for another day.

For someone who might work "from home" on Tuesday and Thursday, is it likely their "office space" would just be unused, and collecting just, for the other 5+ days of the week when they are "away from the office"?? Probably not. . .

( And then you have to present them the invoice for preparing their taxes with this zinger attached. )

FE

[Burke]

I have an employee of a large company who used to work from their local office. Now works from home 5-6 days a week, and none from the company location. We take the OIH.

[Uncle]

Some of my employees work from home

Well, I would allow it if all employees do the same thing and the employer has it in writing in the employment agreement that the employee must work from home a couple days each week. I can see an employer liking this arrangement, but I think it would be tough on the employer requiring ALL employees to do this, because many employees are not capable of working from home. Thus, I think in most cases, tele-work arrangements are more of a convenience for the employee rather than a convenience for the employer. For those employees who can, the employer allows, but does not require. Thus, no office in home.

This is very interesting. I have employees who live and work on different islands and even on the Mainland. A one-way commute to my office would take between 4-10 hours depending upon the employee. So because some of my local employees come to my office every day my remote employees cannot, ever, under any circumstances, ever claim home office expenses?

[Bees Knees]

Well, I would allow it if all employees do the same thing and the employer has it in writing in the employment agreement that the employee must work from home a couple days each week. I can see an employer liking this arrangement, but I think it would be tough on the employer requiring ALL employees to do this, because many employees are not capable of working from home. Thus, I think in most cases, tele-work arrangements are more of a convenience for the employee rather than a convenience for the employer. For those employees who can, the employer allows, but does not require. Thus, no office in home.

[MDEA]

tele work

I have not allowed any clients to claim home office deduction for tele-work but wanted other opinions.Thank you all for contributing.

[Bees Knees]

I agree with FEDUKE404.

I think the biggest problem is this: The employee wants to save some commuting and the employer wants to use office space available more efficiently by cramming more than one employee in the same office on different days.

The big question is what if the employee didn't want to work at home? Would the employer accommodate that employee by allowing him/her to use the office at work every day of the week?

It does not meet the convenience of employer test unless the employer requires it as a condition of employment, and if the employer will accommodate the employee for not having an office in the home, then it is not a condition of employment and no office in home deductions are allowed.

[FEDUKE404]

Work sites

My client is in the office Tuesday and Thursday.Other person in Monday,Wednesday, Friday. Employer pays no additional money. High speed internet is requirement. Must log in and work scheduled hours from home. I di not allow deduction but want other opinions. More companies in the Washington DC area are doing this now.

Many people routinely have "high-speed internet" these days. ( Comes in quite handy for Netflix. )

Your employee has two burdens which must be met:
1 - Requirement that employee MUST work from home. (And, would sitting in a booth at Starbucks also work? )
2 - Proof of any EXTRA costs incurred (internet/OIH/whatever) by client while working away from the Tues/Thurs work site.

If these Tues/Thurs expenses are indeed "necessary," then why doesn't the employer reimburse them?

Barring some significant (written) proof, based on facts at hand I also see no allowable deduction for Form 2106 expenses.

OK, there may be some small crumbs lying around if you wish to pursue electricity used, piece of internet costs, dealing with listed property (check rules for any employee having computer! - something like "must be required by employer" IIRC), regular/exclusive OIH stuff, etc.

Others will certainly disagree. . .

FE

[MDEA]

tele work

My client is in the office Tuesday and Thursday.Other person in Monday,Wednesday, Friday. Employer pays no additional money. High speed internet is requirement. Must log in and work scheduled hours from home. I di not allow deduction but want other opinions. More companies in the Washington DC area are doing this now.

[FEDUKE404]

Color me confused

I am thoroughly confused here.

Is this person an "employee" (W2) or self-employed (Form 1099-MISC)?

If two employees "use the same desk at work" how can you possibly justify office-in-home ?

If W2, "convenience of employer" sounds like a stretch. What exactly would you deduct - part of telephone bill etc? Computer is listed property. . . Office-in-home has income restrictions. And ALL of the above might disappear with the 2% AGI miscellaneous deductions haircut.

If Form 1099-MISC, a very very weak maybe. Same OIH restrictions apply.

What exactly constitutes this "office"?? Corner of kitchen table, laptop on sofa in den, or comparable?

And, as I said upfront, "regular and exclusive use" of the alleged office is gonna be problematic to prove.

I'm surprised this client (and friends) are not lobbying you for travel costs between all of these "work locations."

FE

[Lion]

What does the taxpayer have from the employer saying it's for the employer's convenience? Letter on letterhead. Job offer requiring telecommuting X days/week as a requirement of the job? Employer pays for the telephone/internet/etc. directly? Anything at all that implies the employer needs this arrangement? Tell the client to put something in writing from his employer in his file, but of course what you really want is a copy for your file to CYA.

[David1980]

Greatest hurdle I would see is meeting the "regular and exclusive use" requirement bump in the road.

AFTER that, then you can get more creative.

FE

For employees I always think of the "for the convenience of the employer" as being the big hurdle to get past. Regular and exclusive use too, but on that one taxpayers can more easily lie.

[DonB]

What if the employee's desk is used by another employee on the days they tel-work? The desk is not available those days.

I would say this would make the case of "for the convenience of the employer".

[taxmom34]

how can you take office in home when calls are made in employer's place of business?

[MDEA]

tele work

No two employee's using the same desk at work.Each there are different days.