While social distancing measures are in place, many people are working from home – and this could continue for some time yet.

Don’t forget – home office expenses can be claimed as a tax deduction.

What expenses can I claim?

You will be able to claim a deduction for the additional running expenses you incur?

These are things like:

• Electricity expenses associated with heating, cooling and lighting the area at home which is being used for work,
• Cleaning costs for a dedicated work area,
• Phone and internet expenses,
• Computer consumables (e.g., printer paper and ink) and stationery,
• Depreciation of home office furniture and furnishings (e.g., an office desk and a chair),
• Depreciation of home office equipment (e.g., a computer and a printer).

 

Are there any expenses I can’t claim?

Some costs are not eligible for a deduction as a home office expense:

• occupancy expenses such as mortgage interest, rent and rates
• coffee, tea, milk and other general household items your employer may otherwise have provided you with at work (yes….this includes toilet paper)

 

How do I calculate my deductible expense?

There are 3 different ways that you can choose from to calculate your deduction. Each involve different record-keeping requirements.

 

1. Shortcut Method

This a new method, introduced specifically if you have had to work from home due to COVID-19.

The deduction is a rate of 80 cents per work hour. It covers all additional running expenses listed above.

 

2. Fixed Rate Method

The total amount you can claim is the sum of the following:

• a rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the deline in value of office furniture
• the work-related portion of your actual costs of phone and internet expenses, computer consumables, stationery
• the work-related portion of the decline in value of a computer, laptop or similar device

 

3. Actual Cost Method

This involves claiming the work-related portion of all your running expenses.

It’s recommended to discuss this with your accountant to see if this will be of greater benefit to your personal financial situation. We’re here to help – so don’t hesitate to give us a call or email your usual Partner. Otherwise, speak with our taxation specialists Lauren or Dean.

Lauren Steinheuer:  L.Steinheuer@uhyhnseq.com.au

Dean Vane: D.Vane@uhyhnseq.com.au