10 Most Overlooked Tax Breaks for Remote Workers in 2024
Remote work has become a permanent fixture in the professional landscape, yet many who work from home aren’t taking full advantage of the tax benefits available to them. With changing regulations and new opportunities emerging, 2024 offers remote workers several valuable tax breaks that often go unclaimed. Here’s a closer look at ten tax-saving opportunities you might be missing.
1. Home Office Deduction Expansions
The home office deduction has been simplified and expanded for 2024, making it more accessible than ever. While previously limited to self-employed individuals, recent adjustments now allow certain W-2 employees who work primarily from home to claim this deduction under specific circumstances.
To qualify, you need a dedicated space used exclusively for work—even a clearly defined area (not necessarily an entire room) qualifies. The simplified option lets you deduct $5 per square foot of your home office space (up to 300 square feet). For detailed IRS guidance on the home office deduction, visit the IRS Home Office Deduction page.
“Many remote workers incorrectly assume they don’t qualify for the home office deduction because they have occasional meetings at company headquarters,” explains tax specialist Devon Morris. “In reality, if your home is your primary workplace, you likely qualify even with periodic in-office days.”
2. Internet and Phone Cost Partial Deductions
Your home internet and cell phone have become essential work tools, and the IRS acknowledges this. You can deduct the percentage of these expenses used specifically for work. For instance, if 60% of your internet usage is for work, you may deduct 60% of your annual internet costs. Maintaining a usage log for a typical month helps establish this ratio and provides supporting documentation. See more about deducting business expenses on the IRS Business Expenses page.
3. Utility Bill Proportional Credits
Similar to internet costs, a portion of your household utilities can be deductible when you work from home. Heating, electricity, water, and even garbage services supporting your home office qualify for proportional deductions. Typically, the deduction is based on the percentage of your home’s square footage dedicated to your office. For example, if your office occupies 15% of your home, you can deduct 15% of the utility bills. Learn more about expense allocations in the IRS guidelines for home office expenses.
4. Professional Development Tax Credits
Remote workers who invest in skill development can benefit from credits like the Lifetime Learning Credit, which offers up to $2,000 annually for qualified education expenses. This credit applies even to non-degree courses that help you improve or maintain skills for your current job. For additional details, visit the IRS Education Credits page.
5. State Tax Liability Adjustments
Working remotely across state lines can create complex yet advantageous tax scenarios. If you live in one state but work for an employer based in another, you might face tax obligations in both—but you can also benefit from credits that prevent double taxation. Some states even have specific provisions for remote workers. For insights on multi-state tax issues, refer to resources like the Tax Foundation which provides analysis on state tax policies.
“I’ve seen remote workers overpay thousands in state taxes by not properly addressing multi-state work arrangements,” notes state tax specialist Maya Williams. “Understanding which state has primary taxing authority can lead to significant savings.”
6. Home Improvement Depreciation
Certain home improvements that support your remote work setup may qualify for depreciation deductions. For example, if you’ve installed built-in shelving or upgraded electrical systems for your home office, these capital improvements can be depreciated over time rather than treated as a one-time expense. Detailed guidelines on depreciation are available in IRS Publication 946.
7. Office Furniture and Equipment Write-Offs
The Section 179 deduction allows immediate expensing of office equipment and furniture instead of depreciating them over several years. For 2024, remote workers can deduct up to $1,190,000 in qualifying equipment purchases. This includes ergonomic chairs, desks, computers, monitors, printers, and other necessary work tools. For more on Section 179, visit the IRS Section 179 Deduction page.
8. Software and Subscription Service Deductions
Professional software, cloud storage, project management tools, and other digital subscriptions used for work are fully deductible. Platforms like Zoom, Microsoft Teams, Adobe Creative Cloud, and industry-specific tools qualify when used exclusively for business. For guidance on deducting business software and services, see the IRS guidance on business expenses.
9. Health Insurance Premium Deductions for Self-Employed
Self-employed remote workers can deduct 100% of their health insurance premiums—including coverage for spouses and dependents—as an adjustment to income. This deduction also applies to dental and vision coverage. The key is ensuring that neither you nor your spouse qualifies for employer-subsidized health coverage. For more information, check the IRS Self-Employed Health Insurance Deduction page.
10. Retirement Plan Contribution Benefits
Remote work can offer unique opportunities to maximize retirement contributions. Self-employed individuals can set up Solo 401(k) plans allowing contributions up to $69,000 in 2024 (including catch-up contributions for those 50 and older). Even W-2 remote employees might be able to reallocate savings from reduced commuting costs toward employer-sponsored retirement plans, reducing taxable income significantly. For further details on retirement plans, refer to the IRS Retirement Plans page.
“The flexibility of remote work often creates budget space for additional retirement savings,” notes financial planner Rebecca Chen. “Redirecting even a portion of what was previously spent on commuting toward tax-advantaged retirement accounts can significantly reduce current tax liability while building future security.”
Documentation: The Key to Claiming These Benefits
The common thread among these tax breaks is the need for thorough documentation. Remote workers should maintain:
- Records of all work-related expenses with receipts
- A log of the square footage used exclusively for business
- Documentation of work time (remote versus in-office)
- Evidence of business vs. personal usage for shared resources
Keeping contemporaneous records throughout the year not only simplifies tax preparation but also strengthens your position in case of an audit.
Getting Professional Guidance
While these tax breaks offer significant savings opportunities, tax laws remain complex and situation-specific. Consulting with a tax professional who understands remote work scenarios can help identify which deductions apply to your unique circumstances. The investment in professional advice can pay off many times over through enhanced tax savings and reduced audit risk.
This article is for informational purposes only and does not constitute tax, legal, or professional advice. Tax rules change frequently and vary by individual circumstance. Always consult with qualified tax professionals regarding your specific situation before making decisions.
