Tax Deductions update! The following will affect many peoples work from home tax deductions and is very good to know:

“As tax time looms, the ATO has pointed to four key ineligible work-from-home claims it will be watching closely as taxpayers look to make the most of flexible working arrangements”.

  • The temporary shortcut method, extended to 30 June this year, allows taxpayers to claim a fixed rate of 80 cents an hour for all running expenses incurred as a result of working from home, as opposed to calculating costs for specific expenses. You just multiply the hours worked at home by 80 cents,
  • “The only proof you need is a record of the number of hours you’ve worked from home, such as a timesheet.”
  • This temporary shortcut method is all-inclusive, it covers a range of running expenses including electricity for lighting, cooling, heating and the running of other electronic items; phone and internet costs; and the depreciation of various items spanning computers, laptops, home office furniture, and other household fixtures that see wear as a result of a taxpayer’s working arrangements.

Beware of the following:

  • Personal expenses, like coffee, tea and toilet paper — which, while may be made available by some employers — aren’t directly related to earning income, and cannot be claimed by taxpayers.
  • Other ineligible expenses include those related to a child’s education, like online learning courses, or laptops, as well as large up-front costs. Those could include any asset that costs over $300, like a computer (depreciated instead).
  • Employees generally aren’t able to claim rent, mortgage interest, property insurance, or other land taxes and rates. The Tax Office said that working from home does not make a taxpayer’s home a place of business for tax purposes and warns that claiming occupancy expenses could expose some taxpayers to capital gains tax when they leave their homes.

As always contact VJC if you have any questions, read the full article here :

General Advice warning: the information in this article is general in nature, it is not advice specific to your needs. If you want to act upon the information in this article then you should seek advice from a qualified professional. VJC WM accepts no liability to any party for acting from this information unless they have sought advice in a formal engagement with VJC WM for this purpose.