Working from home – Deductions you can claim
Risks posed by the coronavirus and the introduction social distancing has forced some employees to work from home.
The ATO has recognised this and has released guidance as to what can and cannot be claimed as a tax deduction.
If you do work from home, you can claim the additional costs associated and importantly you need to make sure that you have incurred these costs and not been reimbursed by your employer.
You can claim the additional cost of items such as:
– Electricity
– Home internet
– Mobile and or home phone
– Stationery and computer consumables
– Home office equipment (either immediately or claiming over time (depreciation) if costing $300 or more)
There are various methods which can be used but the ATO has introduced a concessional rate of 80 cents per hour from the 1st March to the 30th June.
A standard rate continues to be available at 52 cents per hour which also allows separate claims reflecting the work use proportions of home internet, phones, depreciation etc.
How do you take advantage of the concessional or standard rates?
Keep a diary or log of the time spent working from home. When preparing your return the claims are based on the total hours by the applicable rate (and additional items if circumstances allow).
We recommend keeping a record for the full period you are working from home and not calculate any averages or make any estimations.
Start keeping a record now and be diligent. If you are selected for an audit or review the ATO will ask for proof and penalties and interest will likely be applied for those taxpayers not keeping proper records.
Contact CrossCorp for advice today.
