There are many benefits of working from home and we will be highlighting some of them in this post.
Apollo Technical revealed that there are more than 164.6 million work force in the US and over 4.7 million of this population work remotely from home at least half the time.
If there were no benefits of working from home, this huge number of people wouldn’t be doing it. And the number keeps growing daily. In fact, Upwork has predicted this trend to rise to 36.2 million in 2025.
So what are the benefits of working from home?
What Are The Benefits Of Working From Home?
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Below are some of the reasons why many Americans are happier working from home.
Less time commuting
People who work from home don’t spend time on the road going to and fro work.
Their office is right in their home. All they have to do is go to their work desk, no waste of time, no traffic, and no money spent on transportation or fuel.
Also, not commuting to work reduces stress. It also reduces pollution in the environment, and respiratory issues that occur as a result of the pollution.
This analysis by the Texas A&M Transportation Institute revealed that an average American who drives to work spends about 54 hours annually stuck in traffic.
This time can be put into work and converted to more productivity when working from home. The only commuting you will be doing working from home is from your bed to your work desk (haha).
Due to less stress, less time spent on the road, no traffic and all other factors that hinder productivity, remote workers are 13% more productive than their office counterparts.
They can also spend longer hours at work since they work from home.
Eliminates pollution from the environment
Talking about greenhouse gas emission, the Global workplace Analytics estimated that if everyone works from home in the US, it could reduce the emission of greenhouse gas from vehicles to up to 51 metric tons a year.
This will make the environment cleaner, safer, and healthier.
Saves lot of money
Working from home saves a lot of money. The Global Workplace Analytics also estimated that people can save between $2,000 to $6,500 yearly.
This is possible because work from home eliminates the need for:
- Transport fare or gasoline
- Day care
- Buying lunch and snacks at works
We all know how lunch can be expensive, however this depends on where you live. But in expensive cities like San Francisco, you can see a sandwich for $15 or a cup of coffee for $4.
While working from home, you can save all this money by making your own lunch.
It also eliminates the need for companies to pay for real estate, it reduces the need for a large office space and companies can save lots of money allowing their employees to work from home.
Work from home offers a lot of flexibility. You can work when you want and from anywhere you choose. You can take a break at any time you want to, travel when you want to – all that is expected of you is to complete your tasks.
Also, you can pick the calls of your friends and family members when they call, you won’t have to eat lunch at weird times, you will be free to set your schedules the way you want etc.
The flexibility work-from-home gives helps you have a better work-life balance. You can start your day and end it as you please.
In working from home, you can set your work environment as you please. But in an office setting, you have no control over this, you only have to adjust.
You can set the noise level the way you want it.
This is one of my best parts of working from home. You are free to wear whatever you want, including your sweatpants from college, even if the letters are peeling off, lol.
You will also save money on clothing as work from home jobs don’t need a dress code like all those professional wears that can be quite expensive. Dry cleaning and laundry services also make this more expensive.
You can easily make and receive calls
When working from home, you don’t have to look for a conference room to make or receive calls. You also don’t have to deal with any chatty co-worker.
Although sometimes, kids, pets, and people at home can make this tough for you.
No office distractions
You will be more productive because there would be no distractions like co-workers debating, sirens wailing outside the streets, etc.
All your time will be used to focus on work (except of course if you have kids! Check out this helpful post on working from home with kids)
More time for your family
You will have more time for your family. You can take care of your sick family member while working from home, have some time for your pets, or even have some personal time to yourself.
Not restricted by location
Work from home jobs give you the benefit to access a wide range of jobs outside your geographical location. This is so helpful for people who are living in small towns or rural areas where there are not many jobs.
Remote workers, freelancers, and self-employed individuals are more likely to be qualified for tax breaks like a depreciation of equipment deduction or home office deduction.
Work from home people are happier
All these benefits listed above make people who work from home happier than their counterparts who go to the office, and they are less likely to quit.
It also increases their loyalty because they won’t want to give this freedom up for anything.
What Are The Tax Benefits Of Working From Home?
Yes, there are tax benefits of working from home and one of it is tax deduction. However, not every remote worker is eligible for this.
To qualify, some factors are put into consideration like; whether you have a dedicated home office space where you don’t do anything else, whether you are self-employed, or if you work for someone.
Right now, under the current law, you can only be eligible for a home office deduction if you are self-employed.
Note that this includes people who work from home full time and people who freelance as a side gig, even though they work for an employer.
Your home office must also meet some certain standards to qualify for tax break. To qualify, you must use part of your home regularly and exclusively for business.
This doesn’t mean that your office has to be in a separate room. It only means that your office should be in an area of your home where you don’t do anything else there.
This can be a dedicated nook in the corner of your living room or basement. But it cannot be the kitchen table or dining area where your family eats.
How to calculate your home office deductions
There are two options when it comes to tax deductions for people working from home. The first option is simplified and easier but leads to smaller tax breaks.
The second option, however, requires more complex calculations and record keeping but it leads to larger deductions. You can change your method from year to year to see which one suits you best or see which method yields the highest deduction.
The simplified option
In this method, you deduct $5 per square foot of your home office, if you have up to 300 square feet, you will get a maximum deduction of $1,500.
If you qualify for this, you can take this tax break without keeping records of specific expenses. This method is preferred by many because it is easier and you don’t have to keep meticulous records.
You also don’t have to worry about depreciation recapture when you sell your house.
The standard option
In this method, you deduct your actual expenses. You can deduct 100% of your home office expenses like the cost of repairs, painting, etc. You can also deduct a portion of some overall house expenses based on the area of the home you are using as an office.
For instance, if your home office is one-tenth of the square footage of your house, then you deduct 10% of the cost of your total mortgage rent or interest.
You should also do the same for utilities such as gas bills, water, and electricity, and even homeowner insurance. Also, deduct 10% of other whole-house expenses such as exterminator fees and cleaning.
It is also allowed to deduct a portion of your property taxes and depreciation on the home. These calculations are a bit complex, but you can use the instructions on the IRS form 8829 to make things easier for you.
Make sure you keep the receipts of your expenses in your tax files. Then you can check the IRS publication 587 to see a list of eligible expenses.
For more information about tax-deductible business expenses, see the IRS publication 535 business expenses.
How to take your tax deductions
If you choose to use the simplified method, you can take your tax deductions directly on Schedule C by reporting your business income and expenses.
If you choose the standard method, then you will be required to submit Form 8829 with your income tax return. Then you report your total deduction from your business income on Schedule C.
Note that your deductions may be limited if the expenses in your home office are more than that of your business income for the year.
The business use of home expenses cannot make the Schedule C income go below zero and if there is unused business use of home expenses, it will be carried over to the next year.
However, carryover is disallowed if the simplified method is used. Learn more about working from home tax deduction.
Drawbacks Of Working From Home
Struggle to concentrate
We know we said that there are no distractions when working from home, this is true but you should also know that you will struggle with willpower some days.
You will have lots of projects to do on some days and your body will want to sit down and watch some series on Netflix.
This is one of the struggles of working from home, lol. This just calls for self-discipline. You also have to ensure that you don’t spend all your time on social media when you have a project to do.
Difficulty following a routine
It is difficult to stick to a routine when working from home because the order in which you do things at work is different from when you’re doing things from home.
This can make it tough for some people to mirror their processes and schedule their time when outside an office setting.
It can be boring
You will miss those office conversations, meeting your co-workers, making new friends, meeting new people, etc.
When working from home, you will be at home most of the day, how long can you continue without seeing another human?
So yes, lack of social interaction is one big turn off in working from home for most people.
If you choose to work from home, make sure you include social gatherings and outings into your plan. You should have time to hang out with family and friends.
High risks of overworking
Working from home can make you too focused on work and you spend all your day working. This can lead to overworking and burnouts.
Also, you can easily form a habit that is difficult to break which is sitting in front of a computer for a long time.
Distractions at home
There are many distractions at home that can interfere with the peace and quiet you enjoy. These distractions can be from your kids, your pets, your family members, neighbors, etc.
You may also have other things to cater to at home that makes focusing on work difficult.
Working from home has many benefits, including tax deductions. This post highlights some of the most important benefits of working from home, but also the drawbacks, to give a balanced perspective.
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