Should Work-from-Home Benefits be Taxed?
Our tax lawyers have become aware of a recent survey conducted by Deutsche Bank Research. The objective of the survey was to take a look at the significant shift toward working remotely that is now taking place across the globe. Obviously, this shift is a direct result of the Covid-19 pandemic. When cases began to surge in the spring of 2020, a significant number of companies diverted employees from their normal daily routine in an office building or other commercial establishment to working from home. In certain cases, companies decided to make some of these changes permanent. The recent surge of additional coronavirus cases may elongate this arrangement, even for companies who plan to eventually call employees back to a normal work environment. For this reason, there is some speculation about a possible new Work-from-Home Tax.
An Interesting Shift for Companies and Employees Alike
The survey, which was conducted on 800 people in the month of September, also uncovered some interesting data about the way the change was viewed by many individuals. Professional, personal, and financial advantages emerged, and, according to the survey results, over 50% of individuals now working from home prefer to continue in this fashion for at least two to three days a week even after the Covid-19 virus is under control and life returns to normal.
Pros and Cons of Working Remotely for the Individual and the Economy
Many things change when people work from home, such as their personal level of comfort as well as the burden of traveling, paying for lunch, and having to socialize with other people, whose company one may or may not enjoy. Strategists at Deutsche Bank Research also determined that working remotely offers greater flexibility and more job security. However, on the downside, those working from home also contribute less to the economy’s infrastructure, and this has the potential to affect the current economic slump in a negative way. Deutsche Bank strategist Luke Templeman stated that this lack of contribution to the infrastructure of the economy is a big problem, as it has taken decades to create an economic environment that supports a face-to-face work atmosphere.
New Tax Adds to the Complexity of Remote Working
Strategists from Deutsche Bank AG’s research arm are of the opinion that choosing to continue to work remotely once the virus crisis is over is a benefit that workers should pay for, although not every tax attorney would necessarily agree. According to Templeman, the research team that conducted the survey proposed a 5% tax for those choosing to work at home on a continuous basis if it is not due to a shutdown mandated by the government. The new tax could raise approximately $48 billion a year in the United States, and the money could be used to subsidize essential workers and low-income earners who cannot work remotely. However, it may also create tax problems for others.
If employees choose to continue to work remotely due to their own needs or preferences, they could be taxed for each day they work at home. In the United States, the strategists have stated that a tax of this kind could potentially fund $1,500 grants to the 29 million workers who earn less than $30,000 a year and are unable to work remotely.
Templeman said it makes sense to support the high number of individuals who suddenly found themselves out of work due to situations beyond their control, and the economy could use the aforementioned tax to help balance this problem. Anyone in need of additional information about taxes or the possible tax repercussions associated with working from home should contact reputable tax lawyers for advice.
Each time the new tax season rolls around, it seems like there’s yet another story involving tax evasion or some type of new tax scheme. This year is no different. Recently, the U.S. Attorney’s Office brought charges against two Bay Area tax preparers who allegedly...
Reality Star Jax Taylor at Odds With IRS and California Franchise Tax Board Virtually any tax attorney in San Francisco would agree that reality stars appear to have frequent problems with taxes. It seems like every time we turn around, another high-profile reality...
According to Chuck Rettig, Internal Revenue Service Commissioner, the IRS is trying to help taxpayers navigate the unusual circumstances related to this year’s tax-filing season. Most of the confusion is due to temporary tax-regulation changes related to the 2020...