Most People Who Want to Work From Home Don’t Know About the Hidden Costs

Saving on commute is great, but don’t overlook the extra expenses of remote work

Working from home offers flexibility, zero commute and potential savings. Yet many remote workers discover new expenses, technology upgrades, higher utility bills and more—that cut into those savings. Before you make the switch, know the true costs of building and operating a home office.

Technology and Equipment

Your laptop, smartphone and headset become critical business tools. If your devices are old or underpowered you may need to upgrade to meet performance and security demands. Budget for hardware replacements and maintenance. Consider setting aside three to five percent of your annual earnings for technology refreshes. If you are an independent contractor you may qualify for a tax deduction, consult a tax advisor for eligibility.

High-Speed Internet and Utilities

Reliable high-speed Internet is nonnegotiable. You may need to upgrade your plan or add a backup connection, especially if your area limits bandwidth. Increased data usage can push you over monthly caps, resulting in overage fees. Track your business versus personal usage and discuss deductible portions with your accountant. Don’t forget that heating or cooling a home office all day raises electricity bills compared to office-based work.

Office Supplies and Furniture

Staplers, printer ink, paper and pens add up quickly. A quality office chair and desk are investments in your health and productivity. Ergonomic furniture reduces discomfort but can cost several hundred dollars. Compare costs to potential tax benefits, home office expenses may qualify for deductions if you meet IRS requirements.

Food and Beverages

Without a commute you might spend more on coffee, snacks and lunch deliveries. On the flip side, grocery bills can rise if you keep a stocked kitchen. Plan meals and brew at home to control costs. Track out-of-pocket food expenses if you work as a freelancer, they may be partially deductible when traveling for client meetings.

Health and Wellness

At the office you may have access to on site fitness facilities or employer sponsored gym discounts. At home you bear full cost of memberships and equipment. Include health insurance premiums, ergonomic accessories and periodic wellness apps or telehealth subscriptions in your budget to avoid burnout and maintain productivity.

Travel and Meetings

Video calls reduce travel but in person meetings still happen. Mileage, parking, rideshares and meals for client visits all draw from your wallet. Keep detailed records of these expenses, especially if you are self employed, they can be deductible business travel costs under IRS rules.

Insurance and Liability

Standard homeowners or renters policies often exclude business property or liability. If you store expensive equipment or meet clients at home, consider a rider or separate business policy. Compare premiums for a small business owner’s policy versus potential out-of-pocket losses.

Work-Life Balance and Productivity

Blurring home and work can lead to longer hours and stress. Overworking reduces hourly earnings and can impact personal relationships. Set clear office hours, take regular breaks and use time management tools to maintain a healthy balance.

Tax and State Considerations

If you live in North Carolina but serve clients elsewhere, verify state income tax rules for remote work. Check with the NC Department of Revenue on withholding requirements and home office deductions. Keep accurate logs of your work location and expenses to prepare for tax season.

Working remotely has many perks, but the hidden costs can add up. Evaluate technology, utilities, supplies and insurance before you transition. Budget for ongoing expenses and explore available deductions to ensure remote work truly pays off.