A guide to working from home tax deductions
Tax time has arrived and with many of us working from home during the COVID-19 lockdowns, there are several home office and working from home expenses that you may be able to claim as a tax deduction.
To claim your working from home expenses, you must:
- be working from home to fulfill your employment duties, not just carrying out nominal tasks like intermittently checking emails or taking calls
- incur additional expenses as a result of working from home.
For sole traders or business owners where your home is your principal place of business, you may have different tax deductions you are able to claim.
If you’re an employee who works from home, you may be able to claim the following:
- phone and internet expenses
- computer consumables such as printing paper and ink and stationery
- home office equipment such as computers, phones, printers and furniture.
Here are the expenses you can’t claim:
- coffee, tea, milk and other general household items your employer may typically provide at work
- equipment you buy for your children’s education such as an iPad or desk
- any item your employer provides such as a laptop or phone
- any item where your employer pays for or reimburses you for the expense
- occupancy expenses such as mortgage interest, rent water and rates.
How to claim working from home expenses:
Firstly, you will be required to determine what method you will use to calculate the deductions depending on your circumstances.
- Shortcut method – an all-inclusive rate of 80 cents per work hour (temporary due to COVID-19).
- Fixed rate method – 52 cents.
- Actual cost method.
You may be able to claim the full cost of the items if less than $300, or the decline in value (depreciation) for any items over $300.
The Australian Taxation Office (ATO) provides a calculator to assist in determining your deduction. Visit the ATO website here.
If you aren’t sure how or what to claim, please let our team or your accountant know.