As we all are working from home the ATO has released a special arrangement for this year due to COVID-19 to make it easier for people to claim deductions for working from home.

It is great!

 

  • The new arrangement will allow people to claim a rate of 80 cents per hour for all their running expenses, rather than needing them to calculate costs for specific running expenses.
  • Multiple people living in the same house can claim this new rate. For example, a couple living together could each individually claim the 80 cents per hour rate.
  • The requirement to have a dedicated work from home area has also been removed.
  • If you choose to use this shortcut method, all you need to do is keep a record of the hours you worked from home as evidence of your claim.
  • This new shortcut arrangement does not prohibit people from making a working from home claim under existing arrangements, where you calculate all or part of your running expenses.

 

Working from home claims for 1 March to 30 June

There are 3 ways that you can choose to calculate your additional running expenses for the 1 March – 30 June period:

 

  1. Claim a rate of 80 cents per work hour for all additional running expenses.
  2. Claim a rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture, plus calculate the work-related portion of your phone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device
  3. Claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis.

The ATO is also reminding people that the three golden rules for deductions still apply.

 

  • Taxpayers must have spent the money themselves and not have been reimbursed,
  • the claim must be directly related to earning income,
  • and there must be a record to substantiate the claim.

 

Working from home claims before 1 March to 30 June – the normal law applies

Claims for working from home expenses prior to 1 March 2020 should be calculated using the existing approaches and are subject to the existing requirements i.e. calculating your exact costs including the % business use.

For further information:

https://www.ato.gov.au/Media-centre/Media-releases/New-working-from-home-shortcut/

Please call us if you would like to discuss.
VJC Accounting Team