Are you like so many Australians who shifted to working from home during the COVID-19 pandemic? If yes, you may be entitled to claim work from home deductions on your 2020, 2021 and 2022 tax return.
The bonus: you could end up with more money in your pocket at tax time!
What expenses can I claim? According to the Australian Taxation office (ATO), people working from home are able to claim the following ‘running expenses’:
electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work
cleaning costs for a dedicated work area
phone and internet expenses
computer consumables (for example, printer paper and ink) and stationery
home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the:
full cost of items up to $300
decline in value for items over $300.
What are expenses related to WFH that I can’t claim?
Expenses related to occupancy, such as your mortgage interest, rent or rants are not applicable for deduction.
General household items your employer typically provide in an office such as milk and coffee are also not able to be claimed on your tax.
How to calculate my claim.
Fixed rate method
You can claim 52c per hour you work from home. Plus, you can separately claim the work-related portion of your phone, internet, computer depreciation and other expenses.
The “shortcut” method: the new way
Similar to running expenses, under this method (available only from March 2020 onwards) you can claim 80c per hour. However, this method excludes all of your other deductions relating to work from home! You can’t claim other work from home items like phone, internet, stationery or furniture/equipment depreciation separately.
The ATO promotes this “80 cents” method, but for most people it results in a smaller tax refund.
Are you keeping your records?
When claiming any tax deduction, you must keep records.
If you use the shortcut method, you’ll only need to keep a record of the hours you work from home. You can do this by using a spreadsheet or keeping a diary.
If you choose to claim expenses using different methods, you’ll need to record not only your hours worked from home, but also detailed records of all expenses e.g. receipts and utility bills.
We’re here to help
If you’re unsure how to maximise your claim, our Accountants are ready to help. Click here to book an appointment today!