How Does Working from Home Affect Taxes?

If you're an employee working remotely, you cannot deduct home office expenses on your federal return — that deduction was eliminated for W-2 employees in 2018. If you're self-employed, you can claim the home office deduction for space used exclusively and regularly for business. Some states still allow employees to deduct home office expenses on their state return. Working remotely in a different state than your employer may create tax obligations in that state. Track your work location carefully if you're a remote employee who travels.