You Can Pay Less Tax If You Work From Home; Here’s How It Works

Employees have been secretly desiring it for years, and now a pandemic has forced it upon businesses all over the world: telecommuting.

Working from home has become the norm during the Covid-19 outbreak, with everyone urged to stay indoors to curb the spread of the coronavirus.

More than being able to sleep more, reduced travel expenses, and eating more home-cooked food, it’s nice to be able to poop in your own house whenever you want.

Now, you may even be able to claim some tax deductions if you work from home.

You Can Pay Less Tax If You Work From Home; Here’s How It Works

If you live with your 28 siblings, parents, grandparents, spouse, and spouse’s parents, you may have noticed a little increase in your bills these last couple of months.

With everyone working from home, this was bound to happen.

Fortunately, workers will have the option of claiming tax deductions for some of these expenses, said The Inland Revenue Authority of Singapore (IRAS) in a statement on Tuesday (2 June).

According to Iras, tax deductions will be allowable for expenses that are “incurred wholly and exclusively in the production of employment income”.

But how the heck are we supposed to know what expenses are incurred solely from working from home?

Reader: Exactly. If I need 15 cups of bubble tea in the morning to work the rest of the day, does that count?

Well, that’s what I’m here fo- wait, where are you getting your bubble tea from?

Reader: Oh I make it myself.

You make 15 cups of bubble tea every morning?

Reader: I do indeed.

Sadly, I don’t think you’ll be able to claim that as a tax deduction.

Reader: These are dark, dark times we’re living in.

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Here are some things you can claim instead, according to TODAYonline:

WiFi, Electricity, and Telephone Bills

If you have a higher electricity or telephone bill as a result of Netflixing all day working from home, you can claim it as a tax-deductible expense.

Iras said that workers can compare their bills from before they started working from home and after, and calculate the difference.

So, if your electricity bill before working from home was $80 and it’s now $380, I’d first ask what the heck your profession is before telling you that you can claim the difference of $300.

WiFi expenses can only be claimed if your WiFi router was set up only for work purposes. In that instance, you’ll be able to claim the monthly subscription fee as a deduction.

One-time charges like installation fees or connections fees cannot be claimed, however, because they are “capital in nature”, Iras said.

Claims Are For 2021 Income Tax Filing

Iras said that employees can claim these tax deductions during next year’s income tax filing.

So, if you’re planning to do so, please keep proper records of all the expenses you have incurred while working from home.

This makes it easier for the authorities to identify these expenses during audits.

Expenses Can Be Divided Between Household Members

But what if there’s more than one person working from home in the same residence?

Iras said it is prepared to accept an “equal apportionment basis among the working individuals in the same household”.

This basically means that household members can divide the expenses equally amongst themselves.

So, if there are three people telecommuting in your house and the difference in your telephone bill is $30, then each worker can claim $10 in tax deductions.

However, if your employer has already reimbursed you for the aforementioned expenses, then you won’t be able to claim it as a tax deduction.

Working from home may become tiresome after several months, but it certainly has its benefits.

Reader: Like pooping in your own house?

Exactly.