With scores of Australians now working from home in the wake of the coronavirus crisis, this has opened up new tax deduction opportunities for costs related to working from a home office.
Provided your employer isn’t reimbursing you for the various costs of working from home, you’ll be able to claim them as a tax deduction on your next income tax return. Here are the things you can claim.
General home office allowance
The simplest way to claim for a home office is by claiming a fixed rate of 52c per hour that you work from home. This allowance incorporates all of the expenses for running a home office, such as energy bills, home office furniture such as a desk and chair, internet and mobile phone bills and occupancy expenses.
To use this method, you’ll need to keep a diary of the time you spend working from home. You will also need to keep evidence of other items like internet usage, mobile phone expenses, stationary and depreciation of work equipment like computers and smartphones. If you work it out as eight hours a day and five days a week, you would be able to claim $91.52 for the month of April.
The second way to claim for a home office is more complicated – but may result in a higher tax deduction. This method requires you monitoring all of your home office expenses rigorously and retaining all relevant receipts and invoices.
Most likely, expenses that you incur for your home office are shared between personal and work use, such as electricity bills, internet bills, mobile phone bills and rent. Therefore, you’ll need to figure out the work-related portion of every expense and only claim for that.
For more information on expenses you can claim for working from home, see the ATO’s fact page.