What Tax Deductions Are Available for Remote Workers?

Working from home has its perks: no commute, comfy clothes, and maybe even a pet curled up at your feet. But come tax season, many remote workers start wondering: “Are there any tax breaks I can use?” It’s a great question, and the answer depends on how you work, specifically, whether you’re a regular employee or self-employed.

Let’s break down what you can (and can’t) deduct as a remote worker in the U.S., without the confusing jargon.

Who qualifies for remote work tax deductions?

Only self-employed individuals or business owners can typically claim remote work tax deductions. If you’re a W-2 employee working remotely for a company, your options are unfortunately limited.

Since 2018, the Tax Cuts and Jobs Act has eliminated the federal deduction for unreimbursed employee expenses, which used to cover things like home office costs and work-related purchases for W-2 employees. That means unless you’re freelance, running your own business, or filing as an independent contractor, most home-related expenses aren’t going to get you a tax break.

Self-employed? You’re in luck. The IRS allows you to deduct “ordinary and necessary” expenses related to your business, and that includes a bunch of costs associated with remote work.

What is the home office deduction, and how do I qualify?

The home office deduction lets self-employed remote workers write off part of their home expenses if they use the space exclusively for business.

That’s the keyword here: exclusive. Your dining table that doubles as a laptop station? Probably not deductible. But a dedicated desk in your spare room? That might qualify.

There are two ways to calculate this:

Simplified Method: per square foot of office space, up to 300 square feet.
Regular Method: A percentage of your actual home-related expenses like rent, utilities, and repairs, based on the office’s square footage relative to your home.

If you work from home and meet the IRS criteria, this deduction can shave a decent amount off your taxable income.

Can I deduct my internet and utilities?

Yes, if you’re self-employed, you can deduct a portion of your internet and utility bills.

These fall under “indirect expenses,” meaning they help run your business but aren’t tied specifically to your home office space.

Think electricity, heating, and internet. You can deduct the business-use percentage of these costs. So, if you use the internet 60% of the time for work, you can claim 60% of that bill as a deduction.

Just remember: you’ll need to back this up if the IRS ever asks. So it’s worth keeping a few months of usage records or a spreadsheet if you’re estimating.

What office supplies and equipment are tax-deductible?

You can deduct any work-related office supplies and equipment you purchase.

That includes things like:

Printer paper and ink
Pens, notebooks, planners
Desks, chairs, shelves
Computers, monitors, headsets

If the item is under 500 (as per the IRS safe harbor rule), you can usually deduct it fully in the same year you bought it. For pricier equipment, you might have to depreciate it over several years.

Tip: Save your receipts and note the business purpose of each item, especially if you’re buying tech that could be considered dual-use (like a laptop used for both work and Netflix).

Can I deduct business mileage or car expenses?

Yes, if you use your car for work tasks, like meeting clients or picking up business supplies, you may be eligible to deduct mileage or car expenses.

But, and it’s a big but, commuting doesn’t count. Even if you drive to a coworking space, that’s considered a commute in the IRS’s eyes and isn’t deductible.

If your car use qualifies, you have two options for calculating:

Standard mileage rate: 67 cents per mile (for 2024)
Actual expense method: Track gas, maintenance, insurance, and depreciation

Most remote workers don’t use their cars much for business, but if you do, say, for an in-person client meeting, you might be able to write it off.

Are my phone bills deductible if I work from home?

Yes, you can deduct a portion of your phone bill if it’s used for work.

Got a second phone line for business? You can deduct 100% of that. Using your phone for work? Estimate the percentage of time it’s used for business (calls, texts, apps) and deduct that amount.

Like other shared expenses, documentation is key here. A good rule of thumb is to track a typical month’s use and apply that ratio to the full year.

What about digital tools and software subscriptions?

If you pay for software, apps, or platforms that support your business, those costs are usually tax-deductible.

That includes:

Project management tools
Cloud storage
Design or editing software
Bookkeeping or tax software
Paid online courses directly related to your business

The IRS views these as business operating expenses, which are fully deductible in the year you pay them.

Can self-employed workers deduct health insurance premiums?

Yes, if you’re self-employed and not eligible for an employer-sponsored plan, you can deduct your health insurance premiums.

This deduction is taken “above the line,” meaning it reduces your adjusted gross income (AGI) and applies even if you don’t itemize deductions.

You can also include premiums paid for your spouse and dependents, which makes this a valuable deduction for solo business owners with families.

What tax deductions are not available to remote employees?

Remote employees (W-2) currently can’t deduct home office expenses or unreimbursed work costs on their federal taxes.

That includes things like:

Your home internet or phone
Office furniture
Rent or utilities
Any gear you bought with your own money

It’s frustrating, but that’s how the current law stands. However, some employers offer stipends or reimbursement for remote work expenses—so it’s worth asking your HR department about options.

Also, some states still allow deductions for unreimbursed employee expenses, even though the federal government does not. Check your state’s rules or talk to a local tax pro.

Do state tax laws affect remote worker deductions?

Yes, some states have their own rules that might allow deductions for remote work expenses.

A few states still let W-2 employees claim work-related deductions. Others may tax remote workers based on where they physically live or where their employer is based.

With the rise of hybrid and fully remote roles across state lines, this has become a murky area. If you live in one state and work for a company in another, or if you’ve moved while keeping the same remote job, your tax obligations could be more complicated than expected.

When in doubt, it’s smart to consult with a CPA who knows your state’s laws—or use tax software that’s updated for your specific location.

What’s the best way to stay organized for remote work deductions?

Great question. Because if you’re self-employed, keeping your financial ducks in a row is half the battle.

Here’s what helps:

Keep a separate bank account or credit card for business expenses
Save all receipts, paper or digital
Use a simple spreadsheet or bookkeeping tool to track income and expenses
Log your home office measurements and business-use percentages
Document your phone, internet, and utility usage percentages

The IRS loves paper trails. And while you don’t have to submit receipts with your tax return, you will need them if you’re ever audited.

Deductible	Self-Employed	W-2 Employee
Home Office	✅ Yes	❌ No
Internet & Utilities (Business Use)	✅ Yes	❌ No
Office Supplies & Equipment	✅ Yes	❌ No
Business Mileage	✅ Yes	❌ No
Phone (Business Portion)	✅ Yes	❌ No
Software & Subscriptions	✅ Yes	❌ No
Health Insurance Premiums	✅ Yes	❌ No

Quick Recap: What Can Remote Workers Deduct

FAQ: Remote Work Tax Deductions

Can I deduct rent if I work from home? Only if you’re self-employed and meet the requirements for the home office deduction. You’ll deduct the business-use portion of your rent.

Do I need to itemize to claim remote work deductions? No. Most deductions for self-employed workers are “above the line,” so they apply even if you take the standard deduction.

Can I claim both the home office and utility deductions? Yes! The home office deduction can include a portion of utilities, and you may also deduct internet or phone costs separately.

Are there tax deductions for hybrid workers? If you’re self-employed part-time, you can claim deductions for the time and space used exclusively for work. W-2 employees, even hybrid ones, generally cannot deduct home-related work expenses.

Final Thoughts: Make Remote Work Pay Off at Tax Time

If you’re self-employed, tax season is your chance to take advantage of the expenses you’ve been covering all year long. From your Wi-Fi bill to your ergonomic desk chair, these deductions can make a real difference in your bottom line.

If you’re a W-2 employee, you’ve got fewer options for now, but staying informed never hurts. Who knows what future tax law changes could bring?

Looking to make the most of your deductions? Start keeping better records now. Even a basic spreadsheet or receipts folder can go a long way toward saving money later.