As the situation around COVID-19 continues to develop, many employees are now working from home & may incur expenses that you can claim at tax time.
To claim a deduction for working from home, all of the following must apply:
- You must have spent the money.
- The expense must be directly related to earning your income.
- You must have a record to prove it.
What can you claim?
- You can claim for electricity, heating, cooling, lighting, cleaning costs, phone, internet, and home office equipment.
If the cost is crucial to you doing your job from home and you have proof, then it should be claimable.
You can claim the full cost up to $300 for home office equipment, which includes computers, printers, telephones, furniture and furnishings. For bigger amounts, a depreciation deduction in your tax return is permissible.
What can’t you claim?
This info always leads to someone asking, what can’t I claim?
- You can’t claim your mortgage, rent and rates. These are understandable but you also can’t claim coffee, tea, bickies, that you might have got for free at work! Nor toilet paper, but you could claim the paper for your printer.
How do I claim?
Ultimately through your tax return and there are three ways to claim. Here they are:
- The shortcut method, where you simply claim a rate of 80 cents per work hour for all additional running expenses. You keep a timesheet and so if you work 10 hours a day then you can claim $8 a day or $40 a week over how many weeks you are locked up and not at work
- The fixed rate method, which the ATO says “you can claim a deduction of 52 cents for each hour you work from home instead of recording all of your actual expenses for heating, cooling, lighting, cleaning and the decline in value of furniture.” This rate is based on average energy costs and the value of common furniture items used in home business areas.
- The actual cost method: a proportion of the actual cost. If you think your house usage has risen by 20% working from home you claim 20% of heating, phone, etc.
Talk to us at your tax appointment and we can help to maximise your refund.