Due to the Coronavirus (Covid-19) pandemic we find ourselves in an unprecedented time with a large number of employees required to work from home.
If you are an employee and have been working from home due to government imposed or self-isolation requirements you should be able to claim work-related tax deductions for using your home as an office.
The Australian Taxation Office has published guidance on Home Office Expenses which provides that if you are working from home temporarily due to Covid-19 or other recent events you can claim deductions for expenses incurred while carrying out that work.
There are three options available to calculate your tax deduction:
- You can claim the shortcut method of $0.80 per hour
- You can claim the fixed rate method $0.52 per hour
- You can make use of the actual cost method
A diary of the hours spent working from home should be retained to support your claim, regardless of the method used.
The shortcut method is available if you are working from home due to Covid-19 so long as you are fulfilling your employment duties and are incurring additional running expenses as a result.
Minimal tasks such as checking emails or taking phone calls is not considered to be working from home.
The $0.80 per hour covers all deductible running expenses including telephone and internet costs, computer consumables, stationery, and the decline in the value of a computer or other equipment.
You are then unable to make a separate claim in your Return for any of these expenses.
If you use this method you must include a note saying COVID-hourly rate in your tax return.
If you claim a deduction under either the fixed rate method ($0.52 per hour) or the actual cost method in addition to the running expenses you can also claim a deduction for:
- Work-related use of your phone and internet expenses
- Computer consumables (such as printer ink and paper), and stationary
- The decline in value of a computer or other equipment
Note that mortgage interest/rent and rates are exempt costs regardless of the method used – as these costs will be the same whether you work from home or not.
You can also use the ATO home office expenses calculator to help calculate your deductions.
If you are working from home during the COVID-19 pandemic and think you will have a need for help completing your 2020 tax return and claiming a tax deduction for working from home please complete the enquiry form on this page.
We’ll be delighted to have a free no obligation initial chat about how we might help, after which we can send details of our fixed fees to you.