Working from home can be a tax deduction

Working from home can be a tax deduction

With the shift to home-based work you should claim all entitlements for a healthier refund. There are 3 methods of calculation:

  • Fixed rate method: 52cts + electronic costs
  • Actual costs method
  • Shortcut method: 80cts but only for tax year

Not sure which method is the right one for you? See the snapshot below:

Fixed Rate Method

You can claim the fixed rate of 52 cents for each hour you worked from home. The rate includes the additional running expenses you incur for:

  • the decline in value of home office furniture and furnishings – for example, a desk
  • electricity and gas for heating, cooling, and lighting
  • cleaning your home office.

You can also claim the work-related portion of the following expenses, which are not covered by the 52 cents per hour rate, if you incur these expenses as a result of working from home:

  • phone, data and internet expenses including the decline in value of the handset
  • computer consumables and stationery – such as ink
  • decline in value of depreciating assets other than home office furniture and furnishings used for work purposes – for example, computers and laptops.

Actual Cost Method

To use the actual cost method, you must:

  • incur additional running expenses as a result of working from home
  • keep records, for example receipts or other written evidence, which show the amount:
    • you spend on expenses
    • you spend on depreciating assets you buy and use while working from home
    • of work-related use for your expenses and depreciating assets.

Shortcut method

The temporary shortcut method simplifies how you calculate your deduction for working from home expenses.

Using this method, you:

  • can claim 80 cents per hour for each hour you work from home
  • can't claim any other expenses for working from home, even if you bought new equipment.

The shortcut method covers all your working from home expenses, such as:

  • phone expenses
  • internet expenses
  • the decline in value of equipment and furniture
  • electricity and gas for heating, cooling and lighting.

The shortcut method includes decline in value of all items. If you choose to use this method, there is no requirement to separately calculate the decline in value of equipment or depreciating assets or any other working from home expense.

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