Can you claim your home office expenses?
In today’s digital age it has become quite normal for people to spend some of their time working from home, especially considering the current climate with COVID-19. While working from home has its benefits like avoiding the morning rush and commute to work and being able to work in your PJ’s, it can also hurt you bank account if you have to pay for the expenses that your employer would normally be covering, such as internet, electricity, and phone bills. The good thing is that many of these expenses can be claimed back at tax time.
What can be claimed?
The Australian Taxation Office (ATO) allows you to claim the work-related costs of the following items for the time you were working from home:
- Phone (landline and/or mobile)
- Heating/cooling & lighting
- Home office consumables such as stationery and printer ink cartridges
- Cleaning & maintaining your home office area
- Repairing home office equipment and computers
- Value Depreciation of home office furniture and fittings
- Value Depreciation of home office equipment and computers
- Work related items costing less than $300 can be written off in full (no depreciation required).
What cannot be claimed?
If you are an employee who is working from home, the following items are not considered eligible home office expenses for tax purposes:
- Rental payments
- Mortgage interest
- Property insurance
- Land taxes
How can you claim your home office expenses?
The diary method
The first is by providing written records/evidence of the expenses, which can include:
- Receipts for items or equipment
- Diary entries of any small expenses ($10 or less) totalling no more than $200
- Diary entries of expenses of any monetary amount that you cannot get receipts for
- Diary entries of running expenses related to working in your home office. The amount of time spent in the room should be recorded & cover a minimum of four weeks. You can also include calculations of how much time was spent using your equipment
- Itemised phone accounts that highlight work-related calls.
The rate per hour method
The second is known as the ATO rate per hour or 52c per work hour method and provides a more streamlined process for calculating your deductions. You record the number of hours that you use your home office or at-home work area and then multiply the total time by 52 cents.
Don’t forget that you are also able to lodge a separate claim for items such as phone bills, internet expenses & equipment depreciation as well.
If you have any queries, please contact our office on 07 4151 8898.
The Money Edge | Bundaberg