Can I claim income tax deductions on work-from-home expenses from IRAS?

Is never too early to start planning for your income tax filing with IRAS, right? 

My apologies but that's my Tax Consultant side speaking...Old habits die hard!!  

I used to do Personal Tax Planning with PWC! So.......

Can I claim income tax deductions on work-from-home expenses from Inland Revenue Authority of Singapore (IRAS)?

Yes!  So YAY!!!!  We get to claim tax deductions against employment income for Expenses incurred from working at home!  Please don’t get so excited yet.  Not all the work-related expenses will qualify!  As with any tax deduction claims, there will be certain qualifying conditions to be met.

When can you claim the deduction & How to claim the deduction?

First and foremost, you will not expect to claim anything this year because you will be claiming this tax deductions in 2021’s income tax filing.

What type of expenses can you claim as tax deduction?

No double claim!

If you have already been reimbursed by your employer for Work-from-home related expenses, then such expenses will not be entitled for further tax deduction

Costs incurred that are wholly and exclusively borne from Telecommuting towards the production of employment income

Expenses incurred must be related to work i.e., not personal or private in nature

Telecommuting Expenses that you can claim for tax deduction 

By the way, when you are calculating the incremental difference of the expenses incurred “Before” and “After” working from home, “After” period is not limited to Circuit Breaker period only. Even after 1st June 2020, many of us are still working from home now (while I am writing this post).

For telephone bill where we receive monthly invoice, that should be fairly straightforward to compute the incremental difference.

I guess that sounds simple enough. Or is it?

I am not sure about you but my house does not come with a those smart meter. You know those advanced meters that are able to conduct half-hourly readings? So if you wish to calculate incremental increase of your electricity bill incurred before and after or when we started working from home, you would need to wait for awhile for the actual meter reading. This is because according to SP Group, meter readers will not be visiting our premises to record our utility from your meters during this Circuit Breaker. April, May and June utilities consumption will be based on an estimated amount and the difference will be adjusted in our subsequent bill.

So we probably have to look at your electricity bill maybe in later part of this year to compute the incremental increase.

What if my sibling/s are also working from home together with me or my husband or wife etc, how do I apportion the telecommuting expenses incurred for tax deduction?

IRAS has this point covered!  If there are multiple persons working from home in the same household, IRAS will allow an equal apportionment basis among these working individuals.

Now before I end off here, do remember to keep and retain proper documents to record these telecommuting expenses incurred. After all, if we misplace our bills or supporting documents from now till income tax filing timeline in 2021, we would not know how much tax deduction we are able to claim then!

Hope you have found this blog post useful!  

📬Let's chat about property.  Whatsapp Karen Woo @ 9159 2692 for an non-obligatory chat.

Source: IRAS, Business Times, SP group