We could possibly name 2020 as ‘the working from home’ year, due to changes in working arrangements due to COVID-19. These changes have had many people wondering what they can and can’t claim as a deduction at tax time.
So let’s look at what you can claim first;
- Home office equipment including computers, printers, phones, furniture and furnishings (claim either the full cost of items up to $300 or the decline in value for items over $300)
- Computer consumables including printer ink and paper and stationery
- Phone and internet expenses
- Electricity expenses associated with heating, cooling and lighting the area you are working from
- Cleaning costs for the area you are working from
It is important to be aware of the expenses you can’t claim, including;
- Items you’re reimbursed for or paid directly by your employer, or the decline in value of items provided by your employer e.g. laptop or phone
- The cost of beverages (coffee, tea, milk) or other general items normally provided by your employer at work
- Time spent not working, i.e. your lunch breaks or time spent home schooling children
- Costs related to home-schooling and education for your children, including purchasing equipment such as iPads and desks
- Occupancy expenses such as rent, mortgage interest, water and rates
It is important to note that these expenses can be calculated using one of three ways, including the shortcut method which may be applied from 1 March 2020 to 30 September 2020, the fixed rate method or the actual cost method. We like to use the method that will give you the best outcome. It is important to keep a record the number of hours you have worked from home by keeping a timesheet, roster, diary or similar document. For more information on what you can and can’t claim for the 2019/20 tax period, visit https://www.ato.gov.au/General/COVID-19/Support-for-individuals-and-employees/Employees-working-from-home/ or call one of our friendly team on (07) 4638 5300, and let us take care of the numbers for you.