How to make the most out of your tax return
Not sure how the pandemic has affected your tax return this year?
Here’s a guide to working- from-home expenses you can claim this end of financial year.
To claim a deduction for working from home, you must:
- Have spent the money, the expense is related direct to your income and you must have a record to prove it.
- You can’t claim a deduction for items provided by your employer or if you have been reimbursed for the expense
If you aren’t reimbursed by your employer, but receive an allowance to cover expenses when you work from home you:
- Must include this allowance as income in your tax return
- Can claim a deduction for the expenses you incur
If you work from home you can claim:
- Electricity expenses such as light, heating and cooling the area in which you work
- Cleaning costs for a dedicated work area
- Phone and internet expenses
- Computer consumables (for example, printer paper and ink) and stationery
- Home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the full cost of items up to $300 or decline in value for items over $300.
You cannot claim costs such as tea, coffee or milk, costs related to children’s education or time spent not working such as a lunch break.
You will also be unable to claim items that you’re reimbursed for, paid directly by your employer or the decline in value of items provided by your employer – for example, a laptop or a phone.
There are three ways to calculate home office expenses depending on your circumstances. The methods are the:
- Shortcut method (80 cents) – only available March 1 to June 30 2020
- Fixed rate method (52 cents)
- Actual cost method
With the shortcut method, you can claim a deduction of 80 cents per hour you work from home from March 1 to June 30.
But only if you:
- Are working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls
- Have incurred additional running expenses as a result of working from home.
The shortcut method covers all additional running expenses mentioned.
To use the shortcut method you must keep a record of the hours you worked in a time sheet, a diary, a logbook or roster.
For more details on claims go to: www.ato.gov.au/general/covid-19/support-for-individuals-and-employees/employees-working-from-home/.