Working remotely: how to report expenses on your pre-completed tax returnTax Administration Bulletin, 3/17/2021
The Tax Administration expects more corrections and additions to pre-completed tax returns this year than in a long time. This is because a lot of people started working from home last year, which means that they are entitled to certain tax deductions. Pre-completed tax returns are sent out gradually. Wage earners and pensioners can expect to see their tax returns in MyTax starting 18 March.
In the spring of 2020, an estimated one million wage earners started working remotely. Expenses related to working from home can be deducted in taxation as expenses for the production of income. In the 2019 tax assessment, 176,000 wage earners claimed deductions for expenses for the production of income.
A lot of information on deductions related to working remotely is available online: Remote working and deductions - tax.fi. The Tax Administration will also hold a free hour-long webinar on the subject in Finnish on 23 March at 10 am. A recording will be available afterwards. You can also go to the MyTax chat or the Tax Administration’s social media channels for help in any tax-related questions. If you need to take care of personal matters that require identification, please contact our telephone services.
Wage earners receive an automatic €750 deduction for the production of income
The Tax Administration automatically deducts €750 from the taxable income of all wage earners as a deduction for the production of income. If your total expenses for the production of income last year were less than €750, you do not need to report them.
Expenses for the production of income include expenses related to workspace, data communications, work equipment, and other such expenses.
Simplest way to claim a workspace deduction: standard deduction
The simplest way to report workspace-related expenses is to claim a standard workspace deduction. You can claim the standard deduction even if you do not have a separate workspace. You do not have to give grounds for your claim. The amount of the workspace deduction is determined by the number of days you work remotely.
The standard deduction covers the rent for the workspace and its lighting, electricity, heating and cleaning. Furniture, such as desks and work chairs, are also included in the standard deduction. This means that you cannot deduct furniture costs separately.
“In order to claim the deduction, you have to go to MyTax and tick the box for how often you have worked from home last year: more than half the time, less than that, or just occasionally”, says Senior Tax Specialist Minna Palomäki.
If you have worked full-time from home for more than half of all your work days last year, you are entitled to a standard workspace deduction of €900. On the other hand, if you have worked remotely for less than half of your work days, you can deduct €450. If you have only worked occasionally from home, your standard deduction is €225. If both spouses have worked from home, both can claim the standard workspace deduction according to the number of days they have worked remotely.
You can also deduct your actual workspace expenses – remember to keep the receipts
Instead of claiming the standard deduction, you can also choose to deduct the actual expenses caused by remote work. If you do, you must be able to provide receipts for all purchases you have made.
“In order to deduct actual costs for furniture, you need to have worked remotely for a considerable portion of your work days – it’s not enough if you have just worked from home occasionally”, Palomäki says.
If the total costs of your purchases and workspace expenses do not exceed the amount of the standard workspace deduction, you should claim the standard deduction instead of reporting the actual expenses.
If you work from home, you can deduct the costs of work equipment and network access
In addition to the workspace deduction, you can claim deductions for the costs of work-related purchases – such as computer screens or keyboards – that you have paid yourself. You must use the reported tools and devices primarily for work.
In addition to costs related to your workspace and work equipment, you can deduct data connection costs. If you primarily use your internet access for work, you can deduct the costs in full. If you use it partly for work, you can deduct half of the costs. If two spouses use the same data connection for the production of income, they can both deduct 25–50% of their total data communications costs.
Expenses for the production of income decrease the amount of taxable income – little impact on the amount of tax payable
Claiming expenses for the production of income decreases the wage earner’s amount of taxable income.
“For example, if you claim a standard workspace deduction of €900, your taxable income is decreased by €150 more than if you were to receive just the €750 automatic deduction for the production of income”, says Palomäki.
The effect that deductions have on the amount of taxes payable depends on the overall amount of the taxpayer’s income.
“In any case, the effects are relatively small. If you earn average income, the decrease is some tens of euros”, Palomäki says.
The Tax Administration would also like to remind wage earners that it is not possible to claim both the workspace deduction (for more than half of the year’s work days) and commuting expenses in full at the same time.
Facts: pre-completed tax returns in spring 2021
- The Tax Administration will send out 4.9 million pre-completed tax returns in the spring.
- 2.1 million wage earners and 1.2 million pensioners will receive their pre-completed tax returns in MyTax by 3 April. Pre-completed tax returns sent by post will arrive later.
- Self-employed individuals, agricultural operators and forestry operators as well as their spouses have already received their pre-completed tax returns. They must check the return and make any additions by 1 April.
- The filing deadlines for wage earners and pensioners are 4 May, 11 May and 18 May. You can see your personal filing deadline on your tax return and in MyTax.
- Because of the coronavirus situation, the Tax Administration recommends using MyTax for making additions. If you need help, you can contact the Tax Administration by telephone or chat or on social media. Due to the pandemic, please avoid visiting our tax offices if possible.
- Make sure that the commuting expenses listed on your pre-completed tax return are correct. Many wage earners had less travelling for work purposes in 2020 than in previous years.
Previous news items on the subject (in Finnish and Swedish only, links to Finnish):