During the unprecedented time during Covid19 more and more employees were being required to work from home and have a designated working area. Working from home means you may incur expenses that you can claim at tax time. To be able to claim a tax deduction for working from home, all of the following must apply:

-         You must have spent the money

-         The expenses must be directly related to earning your income

-         You must have a record to prove it.

You cannot claim a tax deduction for items provided by your employer or if you have been reimbursed for expenses.

Expenses that you able to claim a tax deduction for include the following:

-         Electricity such as heating, cooling and lighting

-         Phone and internet expenses

-         Printer paper, ink and stationery

-         Home office equipment, including computers, printers, phones, furniture and furnishing. Home office equipment can be claimed as follows:

-         cleaning costs for the area

o   Outright claim for items up to $300

o   Items over $300 are depreciated.

Expenses that you cannot claim a tax deduction for include the following:

-         Occupancy costs such as rent, interest on home loan and rates

There are now three options on how to claim these expenses in your tax return:

1.  Temporary Simplified Method -claim a rate of 80 cents per work hour for all additional running expenses

The ATO have introduced a temporary simplified method of calculating additional running expenses. This rate has been introduced for the period from 1 March 2020 to 30 June 2020 (this time frame may be extended). You are able to use this method as long as you are:

o   Working from home to fulfil your employment duties and are not just carrying out minimal tasks such as occasionally checking emails or taking calls.

o   Incurring additional deductible running expenses as a result of working from home.

This simplified method rate covers all deductible running expenses. If you use the shortcut method to claim a deduction for your additional running expenses, you cannot claim a further deduction. For example, if you claim the simplified method rate you cannot then claim a portion of your internet or phone.  To use this method you must keep a record of the number of hours you have worked from home as a result of COVID-19.

2.  Fixed Rate Method – Claim all of these:

o   A rate of 52 cents per work hour for electricity and the decline in value of office furniture

o   The work related portion of your actual costs of phone, internet, computer consumables, stationery

o   The work related portion of the decline in value of a computer or laptop

To use this method you must keep a record of the hours you worked at home as well as the records of your expenses.

3. Actual Cost Method – claim the actual work related portion of all your running expenses, which you need to calculate on a reasonable basis.

o   To use this method you must keep a record of the hours you worked at home as well as the records of your expenses

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