I love the joy and productivity that comes from working from home. While you may save on expenses such as commuting to work, there are other expenses that will increase like your electric bill from running a computer all day. What you may not realize is that even through you are at home, there are plenty of expenses you can get reimbursed for as well as deduct on your taxes. Here I provide a general guide on expenses when working from home based on my own experience in working from home in various corporate roles.
Your expenses and how much you are able to get reimbursed will vary largely depending on how much you work from home, what your employer provides for you, what they are willing to pay for. If you are self employed you may be able to deduct some expenses on your taxes.
The following comes from my experience from working from home for over 20 years in the corporate sector across 3 companies and 2 acquisitions by larger companies. However, I transitioned from being in a sales support role where I worked from home about 30% unless I visited customers or traveled, to a 100% work from home role. Below, I try to address different types of cases.
What are the benefits of working from home in terms of your expenses?
One of the benefits of not having to go into an office are the expenses associated with commuting. No gas bills and generally decreased maintenance on the car, since you aren’t driving as much. Also, you can eat lunch straight out of your own kitchen. No expensive restaurant lunches all of the time. I do recommend getting dressed for work, even if you work from home. That being said, my clothing, hair, and makeup expenses have been much less since I transitioned to fully working from home and not out seeing customers.
Can I get reimbursed for work from home expenses?
Yes, you can get reimbursed for work from home expenses, sometimes referred to as “expensing it”. However, what you can get reimbursed for depends on your specific employer. Every employer can be different, and this can also change as the financial and structural situation of your company changes. If you are self-employed and work from home you may be able to deduct some of your expenses on your taxes.
When can I get reimbursed for work from home expenses?
If your employer provides a certain benefit or tool for you to use, and they pay for it, then you can’t get reimbursed for it. For example, lets say your company provides a cell phone and service for you to use. They pay for it directly. In this case you can’t get it reimbursed.
There may be times, when you can go to conferences or buy books and get it reimbursed. However, there may be times when your company is ‘tightening the belt’ and really watching their expenses. At those times, they will advise what may be restricted for awhile. For example, at times when the economy was weak, our company restricted conference attendance. At other times, I could attend several a year. I would pay and get it reimbursed.
What are best practices to have to get reimbursed for work from home expenses?
Generally, I try to submit what is expected and reasonable. I try not to exploit the system by too many what maybe considered ‘fringe or unnecessary expenses’. I always keep receipts, invoices and/or documentation. It is always a good idea to check with your companies policies on what is reimbursable.
If you are self-employed and work from home, keep good records such as on a spreadsheet. Include the date, vendor, amount and any receipts, invoices or documentation you may have. You may be able to deduct some of those expenses on your taxes.
Can I get reimbursed for my internet bill when I work from home?
Yes, through all of my employers where I worked from home, I was able to get my internet reimbursed. However, if your company provides this for you at home and pays directly for it then no. This assumes the work you do requires internet, such as to get company email, contact customers, use the internet for research or use software that is online etc. I usually submit the internet bill monthly to my employer’s expense report system.
If there are also levels of internet service and speed, you may need to check with them to see what is allowed. Generally, you should be able to work from home with an internet speed that allows you to work without slowing down your work. However, this may depend on the type of work you do. For example, if you develop video games you may need a speed that is superfast.
Can I get reimbursed for my landline phone and cell phone?
This depends on your company. I used to get a landline expensed years ago, but this was disallowed as cell phones became more predominant. If your company provides your cell phone and service, then generally you can’t get this reimbursed. However, if this is required for your work and they don’t provide it then you may be able to expense both the purchase cost of the phone as well as the usage bill.
Can I get reimbursed for office furniture?
This really depends on your company. With the companies I worked for I did not get reimbursed for a desk and office chair. However, I did get reimbursed for a one-time purchase of a printer. However, some companies may allow reimbursement for these items. When I transitioned to a 100% online role, I stopped expensing a printer since I really don’t have a business reason to use one.
Can I get reimbursed for:
Office supplies
Generally, yes for basic office supplies such as notebooks, pens, paper, etc. Unless they provide it. However, in recent years as I’ve transitioned to a fully online role, I have stopped obtaining a lot of these items and expensing them.
Meals at restaurants
This may depend on your role. When I worked in a sales role, where I worked from home and traveled, I would get paid for meals while I traveled. I also got reimbursed for meals with customers. When I transitioned to a 100% work from home role, then I no longer get reimbursed for meals. However, if I travel to a conference or meeting, then yes, I do get to expense them. However, your groceries at home and meals, are generally not reimbursable.
Clothing
Generally work from home clothing is not reimbursable. Unless, you have a particular uniform or accessory you may need for working from home. If you occasionally go to a lab, then your lab coat may be reimbursable. If you go into a construction area and need special boots, goggles or hard hat then yes, this would either be provided or be reimbursable.
Vehicle use
If you partially work at home and do something related to seeing customers, such as sales, or service or other work that may require you to drive, then yes, you may receive reimbursement for vehicle expenses. Some companies have a fleet of vehicles, in which case they may provide a car, insurance, gas cards etc. In some cases you may have to provide the car, and pay for your gas and maintainance and get reimbursed.
If you are 100% work from home, then generally vehicle expenses are not reimbursed. Check with your employer on their specific policies. If you are self employed and you work from home, but you need your vehicle for some aspect of your job, then you might be able to deduct vehicle expenses on your taxes. It would depend on the tax code in your country at the time you are filing. Always consult an accountant or the Tax bureau such as the IRS in the US.
An example (100% Work from home; work for a company)
Here is my list of work from home expenses. I work 100% from home and have a corporate employer
Expenses I am reimbursed for:
- Internet service
- Conference fees, meals, hotel, transportation (if I am allowed to attend that year)
- Parking at a company event (if it is not paid for)
- office supplies – if they don’t provide it
- Computer accessories and supplies – if they don’t provide it
- Expenses related to travel (flights, meals, rental car, parking, etc; if I travel somewhere for my job)
- Software license fees (for specific business related software that the company does not have an account for; for example, they have Microsoft office, so I don’t get reimbursed for this; However, I need a specific design software for my job; the reimburse for that)
What my company provides and I don’t get reimbursed for
- My laptop
- My monitor
- My keyboard
- My cell phone and cell service
- My mouses
- My computer
What I provide and don’t get reimbursed for
- Desk
- Office Chair
- Book or office shelves
an example (30% work from home; 70% ‘field’ sales visiting customers)
This was my previous role where I worked in a sales support role visiting customers, but used my home office as a home base.
What I got reimbursed for
- Internet service
- Parking at customer sites
- Meals with customers
- Conference fees, meals, hotel, transportation (if I am allowed to attend that year)
- Parking at a company event (if it is not paid for)
- office supplies – if they don’t provide it
- Computer accessories and supplies – if they don’t provide it
- Expenses related to travel (flights, meals, rental car, parking, etc; if I travel somewhere for my job)
What my company provided and I didn’t get reimbursed for
- My laptop
- My monitor
- My keyboard
- My cell phone and cell service
- My mouse
- My computer
- Business Software (MS Office, MS Teams, Sharepoint, etc)
Can I deduct work from home expenses on my taxes?
Yes, in most cases you can depending on the country you live in and the tax laws at the time. Always, consult a tax account for the actual laws or the tax bureau. As a US taxpayer, in the past, I have been able to deduct a portion of my home office, as well as other business related expenses that my employer didn’t provide or reimburse for that I paid ‘out of pocket’. For example, expenses related to maintaining your home office such as a portion of electricity, cleaning, etc under ‘business use of home’. For example, at the holidays, I usually buy small gifts <$25 for colleagues with my own money. You may be able to deduct more if you work from home and are self employed, such as your internet.
What do I need to get reimbursed?
You need receipts, bills, invoices or proper documentation. For example, download your internet service provider’s monthly bills.
How do I get reimbursed?
Check with your employer on their expense report policy. Often times, larger companies will have online expense report filing software. You just log-in and fill in the date, vendor, amount, and business purpose on a spreadsheet-like report. Attach any required receipts. Then you submit the report and it will electronically go through your company’s reimbursement process. This typically includes your manager, and members of finance assigned to expense reporting. It may require approvals.
The first time, you will usually want to connect your bank account, so it can be directly deposited when the amount gets reimbursed. Otherwise, finance will give you a physical check.
Working from home presents many benefits. In my experience, I have been able to save both time and money and be more productive. I hope this guide to expensing adds to your knowledge and …..your wallet!
