he pandemic situation has changed everyone’s lifestyle. Since March 2020, more than 5 million employees are working from home which is 3.6% of the total US workforce. A client, Sam, was a college student and self-employed in 2019. He was using his home to run his self-employed business. He had reduced his tax liability for 2019 by deducting the cost of home office. In 2020, Sam graduated and started to work for an accounting firm in NJ. In March, due to the COVID pandemic his office enforced all the employees to work from home. Since he started to work from home, he is regularly and exclusively using a specific room for work and has incurred multiple home-office expenses. For instance, he had to upgrade his internet to perform his work efficiently and this incurred higher monthly internet premium and higher electricity bills as well. He even bought a dual monitor and printer, costing $2000 in total, to work in multiple screens for improving work efficiency.

1. Can Sam deduct his cost of the home office in 2020?
2. Can those expenses related to monthly bills and purchases of equipment be used to reduce the tax liability?
3. Any other suggestions for Sam to reduce his tax liabilities in 2020.

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1 if you work for a company from home then no deductions are ap... View the full answer