Working from home? You can get tax deductions for electricity and phone expenses next year

Since early April, working from home has become a new norm for most working adults in Singapore.

With many employees glued to their laptops at home as they hold Zoom meetings and WhatsApp discussions, one worry that has surfaced is higher electricity and phone bills.

Good news — you can get tax deductions for expenses incurred while working from home.

A spokesperson from Inland Revenue Authority of Singapore (IRAS) recently told The Business Times: "Tax deduction against employment income is allowable for expenses incurred wholly and exclusively in the production of employment income."

These include additional electricity and phone bills incurred when employees are required to work from home (that are not reimbursed by the employer and not capital or private in nature.).

Although most employees rely on Wifi broadband services during this period, they would not qualify for deductions on subscription fees if the connection was set up before they started working from home.

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Since the Ministry of Manpower said that most employees should continue working from home in the first two phases of Singapore's reopening starting June 2, the tax deductions will not be limited to the circuit breaker period.

According to IRAS, those who incurred expenses related to working from home this year may claim for deductions when they file income tax next year.

However, it is still too early to estimate just how much more Singaporeans are spending on electricity during the circuit breaker, electricity retailers told The Business Times.

Taking into account the difficulty of calculating the exact amount of expenses that are related to working from home, IRAS said it would accept the difference in electricity and phone bills before and after the circuit breaker.

In the meantime, all households with at least one Singaporean will receive a one-off $100 sum to cover their utility bills in July or August.

"Singaporeans have given feedback that while they are saving on transport fares and other charges, they are expecting to spend more on their utility bills, as they stay home during the circuit breaker period," Deputy Prime Minister Heng Swee Keat noted in his Fortitude Budget speech on May 26.

ALSO READ: Home hacks: Tips to save on your electricity bill this CB

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