Claiming tax deductions while working from home

Published Jul 9, 2020


DURBAN - With the “new normal "quickly becoming just normal, working from home temporarily or permanently is starting to become a reality. If you’ve made the transition, you may be wondering if you’ll be able to claim tax deductions for any work from home-related expenses.

According to Joon Chong, partner at law firm Webber Wentzel there are very limited circumstances when salaried employees are able to claim deductions for expenses incurred in providing services to an employer.

​​However, Chong said that an individual who earns remuneration from an employer can only claim these home office expenses if:​​

Their home office is equipped for and regularly and exclusively used by the individual to work for the employer for which they earn remuneration;

At least 50% of their remuneration is variable (such as commissions or bonuses) and at least 50% of working hours are spent away from the employer’s office. If the individual has less than 50% of remuneration as variable payments, they can still claim home office expenses if they spend more than 50% of working hours working from home.​​

Meanwhile Deborah Tickle, a tax professor at the University of Cape Town says in order to be considered to be occupied for trade purposes, the part of your home that is used as an office must be specifically equipped for trade (work) purposes, and regularly and exclusively used for those purposes.

“this means if you are working from your dining-room table or desk in your bedroom or family room, you will not be able to claim the costs of using that room.If you don’t have a dedicated home office and your employer is reimbursing you for data, stationery, phone costs, and so on you may claim such costs directly against this reimbursement,” she said.

​The flip side of claiming home office expenses as deductions is that on selling their homes, these employees would need to exclude any capital gains from the home office portion of the house from the primary residence capital gains exclusion, said Chong.

“This exclusion provides for capital gains of up to R2 million on the disposal of a taxpayer’s primary residence or all capital gains if the selling price is less than R2 million, to be disregarded,” she said.

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