Tax home office deduction-GWM Chartered Accountants
The Covid-19 pandemic has seen ‘n lot of people suddenly working from home. This means that some taxpayers may qualify for a home office expense deduction when they submit their 2021 tax returns.
Who qualifies for the home office expense deduction?
You qualify for the deduction if you:
Occupy a part of your home specifically for purposes of trade (which included employment)
The employee must regularly and exclusively use the office for business purposes ie:
What can you deduct?
You can deduct the percentage of the area occupied as office divided by the total area of the home of the following expenses:
In addition to these expenses, other typical expenses you may claim that is not part of home office apportionment:
What are the consequences?
It is important to understand that when a taxpayer claims home office expenses in terms of their primary residence, the capital gains tax exemption that applies when the residence is sold falls away in respect of the gain attributable to the portion of the residence uses as a home office for the period it was used for business purposes.
It is important that you discuss the benefits and risks with your tax practitioner before submitting your tax return.