Hoping for a big and juicy tax return? If you don’t want to come under close scrutiny (also known as the ol' tax audit), it’s important to know what you can claim and big news, the Australian Taxation Office (ATO) has introduced some pretty important working from home deduction changes that may impact how you keep your records.
Working From Home Tax Deductions
As of July 1 2022, there are two main ways to claim your working from home deductions in Australia. The first is the 'actual cost' method which calculates the actual expenses you incur as a result of working from home. You need to keep detailed records to show you incur expenses as a result of working from home which though is more accurate, is a little harder to do.
The second way to calculate your working from home tax deductions is to use the 'fixed rate' method—this is where to ATO has made some changes:
- the fixed rate method has increased from 52 cents an hour to 67 cents per hour from every hour you work from home (it covers internet and phone expenses, electricity and gas, stationary, computer consumables such as printing necessities)
- you no longer need to have a dedicated home office space
The rate per work hour (67 cents) includes the total deductible expenses for the above additional running expenses. If you're using this method be mindful that you can't claim an additional separate deduction for these expenses.
In terms of claiming expenses that the fixed rate doesn't include, you can separately claim a deduction for the work-related use of any technology and office furniture like chairs, desks, computers and bookshelves. You can also claim any repairs and maintenance of these items.
Another key change the ATO has introduced for your handy working from home deductions impacts your record keeping for 2022-2023. If you haven't been keeping a record during this income year, you'll need a representative record of the total number of hours working from home from July 1 2022 to February 28 2023 and a record of the total number of actual hours worked from home from March 1 (until the end of the financial year).
For more information about working from home tax deductions, head over here.
Read on for all the best online tax return services you can use.
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