Ergonomic Home Furniture

My wife recently started a "work from home" job for a company. The company provided her with a computer & monitor and we, in turn, had to install a separate and dedicated internet connection and a telephone line for her to use exclusively in her job (we could not use our current Internet connection or our home phone - company rules). This office is set up in a spare bedroom that is not used for any other purpose (it wasn't used at all until she got this job) & it doesn't have any other furniture except a bookcase and a chair. We have to pay the installation fee plus the monthly bills for the separate Internet and phone lines. We have to purchase an ergonomic desk chair and a fire extinguisher for this office, per the company policy. There is a company inspector coming to verify that we have all of this set up per the company guidelines. She will do all of her work from home with the exception of a meeting she attends for a day every couple of months.

Now here's the bone of contention with the tax deduction. In order to deduct the expense of a home office for an "employee", the office must be for the convenience of the employer and not the employee. She was given a choice of working from home at a reduced rate of pay AND incurring the expenses mentioned above OR working at their site which is quite a distance from our home. If she elected to work at the site, she would receive $1/hour more in pay and would not have to pay the monthly expenses that she does from home.

This is a national company that handles reservations many different well-known for hotels throughout the United States. They have offices in several major cities, and they offer this arrangement to all the employees who take reservations.

So I'm not sure if it satisfies the "at the convenience of the employer" portion of the IRS rule for claiming the deduction as a home office. Most situations are pretty cut and dry, but this one is not. Certainly if all their reservationists decided only to work from the main offices, the company would not have enough room for them and it would then be at the convenience of the employer. As it stands now, I'm not sure.

Someone who has actually dealt with this situation on a tax return please reply. I have done a lot of taxes myself over the years, so I don't really need "In my opinion" answers.

If we can't claim the business expense of the office, then working for less pay & footing all the bills of the office at home really doesn't make much sense.
Oh, and by the way, the "company" does not offer tax advice. They said "See your tax accountant on the requirements for meeting a home office deduction."
Richard, you misread the question. We are not operating a "business", she would be an employee working from home at the convenience of her employer. I am aware of the IRS tax code on home office deductions.

You aren't going to get a reliable answer here, and you need one. You are going to have to consult with a tax advisor knowledgeable about work at home arrangements. Alternately, you could see if your wife can talk with one or more of the other work at home staffers, and see how they claim deductions for a home office or not.

It seems to me that it is 'cut and dried' however. At issue is the point that regardless of how many other reservationists they have, and what their work arrangements with the company are, the company specifically offered your wife the choice to work at home or in the office, and the decision to work at home conveniences only your wife, not the company.

2010-06-08 18:23:21 by Let me steer you

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