Home office expenses claimable for income tax purposes

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Home office expenses

Self-employed individuals and employees who often work from home may be able to reduce their taxable income by claiming some home office expenses.

SA Revenue Service (SARS) has set out specific conditions in order for individuals to qualify for home office deductions. These are

  1. If more than 50% of your income comes from a salary, you can qualify only if your employer allows or requires you to work from home and if you spend more than half your working hours in your home office
  2. If you are a commission earner and your employer does not provide you with an office at company expense, you should be able to qualify
  3. You qualify for the home office deductions if you are a small business owner or a free-lancer who always works from home.

What comprises the home office?

A specific part of your home needs to be used exclusively as your office. Working off your dining-room table or holding meetings in your living area will not suffice for SARS purposes.

A specific area of your home needs to be fully equipped for your office requirements. Taxpayers need to ensure that they have the necessary furniture, fittings, and computer equipment, and internet and telephone connections, among others.

It is important that taxpayers detail the square meterage of their home office on a floor plan as this will be used to determine what percentage of the office expenses will qualify as a deduction against taxable income.

What expenses can I deduct?

Rent payable or interest on a bond will likely be the biggest deduction in most cases. Repairs to the premises and cleaning and maintenance services also qualify.

Rates and taxes and electricity are also deductible. Printing and stationery, telephone and internet and security also qualify.

An expense that many taxpayers overlook is the wear and tear on home office assets such as IT equipment and furniture and fittings.

It is important that taxpayers can prove to SARS that the asset was specifically acquired for the home office and that it cannot be easily transferred to another part of the home. For example, a specialised desk would qualify as a wear and tear deduction, however, an ordinary table that could be used elsewhere in the home would not qualify.