In early 2020 most countries saw themselves going into lock-downs. And with this, many faced a major change to their ordinary working life. Across the world pay cuts, unemployment and working from home took a toll on economies. Thus, governments sought to provide tax deductions for individuals struggling to accommodate the costs of working from home.
Additionally, most major countries such as the United States, United Kingdom, and Australia, offered their citizens pay cuts for certain expenses that stemmed from working at home. So it’s important to find out your government has outlined for your country.
How can you claim for working from home tax deductions?
Most countries possess a similar list of requirements regarding eligibility for tax deductions. To claim these you will need to fall into the category of a remote worker. Furthermore, you need to prove the utility bills and the lack of compensation from your employer.
Additionally, you may find out more about your eligibility for tax deductions from working at home in the US here.
What expenses are eligible for working from home tax deductions?
Utility Bills
Utility bills also known as Running expenses outline the expenses generated through utilizing facilities at home for the purpose of work. These include:
- Electricity
- Gas
- Heating/cooling
- Lighting
- Phone bills
- Cleaning costs
- Water
In most countries, you will be waived a certain percentage from your taxes for the use of these utilities.
Home Office Furniture
With working from home comes the necessity to have adequate furniture and equipment to carry out the business. Home office furniture involves any physical, non-technological items that an individual needs to work at home. These include:
- Desks
- Cabinets
- Shelves
- Organizers
- Additional accessories such as; fans, rugs, lights, heaters, and coolers.
- Miscellaneous items such as; ink, paper, and stationery.
Similar to running expenses, you will be required to prove that the furniture is used solely for work purposes.
Occupation Expense
These expenses often involve costs generated by the individual for utilizing the space at home for work purposes. These include:
- Mortgage
- Rent
- Land tax
- House Insurance premium
While harder to claim than other tax deduction expenses, you will need to prove that the space at home being utilized is due to the lack of alternative workspace provided by the employer. Furthermore, you will need to show that the space is used solely for work and not for any other household use.
Computer Hardware
Working from home brings about the need to purchase a plethora of technological equipment. Tax deductions for computer hardware include any technological related item that is used for the purpose of work such as;
- Monitors
- Keyboards
- Mouse
- Cables
- Adapters
- Phones
Often you may need to prove that these equipment were not provided nor compensated for by the employer. In some countries, you may also be eligible for tax deductions on the repairs of these equipment.
