December 02, 2019 | money-management
Work Remotely and Save: The Financial Benefits of Working From Home
Remote work is a growing trend in today’s workforce. Some studies even suggest that more than 50% of the U.S. workforce will be fully remote within the next decade. Employees are embracing this flexible work lifestyle by spending their day working in the comfort of their own home. Working from home has benefits that extend beyond getting to wear your pajamas all day. These are just a few of the financial benefits of working from home.
Eliminate Your Commute Expenses
It’s a fact that the average full-time American worker spends a good deal of time on the road. According to 2018 data, the average one-way commute is now just over 27 minutes. That’s nearly an hour each day spent commuting that could have been spent doing other, more productive and fulfilling things. It's hard to strike a healthy work-life balance when getting to work is half the problem.
When you have the opportunity to work from home, your commute is just a few steps to your home office. Your office is wherever you are, so you can ditch that time-consuming drive to work every morning. But eliminating your daily commute doesn’t just save you time; it also saves you money in the form of transportation costs.
Less Fuel and Maintenance Costs
With average commutes falling around 16 miles one way, you can quickly see how much one can save on fuel costs alone. Driving less also means less wear and tear on your vehicle and fewer maintenance costs. Keeping your mileage low will help your car maintain its value, meaning that when you decide to sell it, you can potentially get more cash.
Speaking of selling your car— if you’re a two-plus car household, remote work might make it feasible to sell one car. Once you sell your vehicle, you’ll only have to worry about the maintenance and upkeep of one vehicle.
Lower Auto Insurance Premiums
By decreasing the amount of time that you’re in your car, you lessen the chance of being in an automobile accident. Because of this, you might be able to negotiate lower insurance premiums with your auto insurance provider if you let them know that you work remotely.
Smaller Public Transportation Costs
Even if you don’t have a car, you’ll save. Though it’s typically cheaper than owning a vehicle, public transportation costs can start to add up. Metro and bus cards can cost upwards of several hundred dollars a month, depending on where you live.
Ability to Move Somewhere Cheaper
Convenience comes at a cost. Downtown apartments may be close to the office and save you on commute times, but they’ll require a hefty price tag. The ability to work wherever you want gives you the freedom to move to inexpensive places that might be more inconvenient for the average office worker.
Helpful Tax Deductions
Even though you’ll save in some respects by working from home, you may find your expenses increasing in other areas. Being home all day may mean using more utilities and putting together the perfect home office isn’t without its costs. Luckily, the federal government allows you to deduct some of these expenses from your income.
Due to the 2018 Tax Cuts and Jobs Act, employees of companies can no longer deduct unreimbursed employee expenses for things like business-related travel, meals, and entertainment. But the rules are a little different for freelancers. If you work as an independent contractor, you may be able to write off the following expenses:
- Home Office Costs. If your home has a dedicated office or workspace, you can deduct a percentage of your rent or mortgage interest and utilities. The amount you deduct will be proportional to the size of your workspace. So if your office takes up 10% of your home or apartment, you can deduct 10% of those expenses.
- Equipment, Software, and Office Supplies. Computers, printers, accessories, and anything else you may need to operate your business are also deductible. Software purchases and subscriptions can also be written off, as long as it is relevant to your work. Even office supplies and necessary furniture like filing cabinets and desks can count!
- Professional Services. You may be an independent contractor, but that doesn’t mean you work alone. Hiring others to help keep your business running— like a lawyer, a content writer, or a graphic designer for your website— is also tax-deductible.
- Professional Training and Education. Do you take classes to keep your skills sharp? Write off any vocational education and training courses that you take.
- Business-Related Travel Expenses, Meals, and Entertainment. While you can’t write off a digital nomad lifestyle as a travel expense, if you are required to travel for the job, you may be able to deduct those costs from your taxes. The rules around meal and entertainment deductions can get a little tricky, so be sure to read all of the IRS guidelines carefully.
Even Small Dollars Add Up
Those are some of the significant ways you’ll save by working from home. But don’t discount the small expenses that start to add up when you work from an office.
- Make Your Lunch. Not having time in the morning to fix your lunch before work is an excellent excuse to eat out if you work in an office. But if you work at home, eating out for every meal is a little harder to justify. You’ll find savings by making your lunch at home.
- Brew Your Coffee. This may seem small, but all those afternoon pick-me-ups you grab on your afternoon break can start to add up! If you’re at home, you can brew your own coffee or tea to save yourself from those daily $5 lattes.
- Ditch Expensive Clothes. Tired of dressing to the nines for work every day? Unless you have some high fashion standards for yourself, dressing up isn’t necessary when you work from home. This could potentially save you hundreds each year in business apparel and dry cleaning costs.
Just the Tip of the Iceberg
These financial benefits are only a few that remote workers report when working from home. Many find that eliminating the office even increases productivity and boosts energy when compared to their office counterparts. It’s no wonder that it is a growing trend!
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