Claiming working from home expenses in your tax return?

With the COVID-19 pandemic in full swing during the 2020-21 financial year, more of us were working from home than ever before. This means we may be eligible to claim more working from home expenses in our tax return than in previous years, but it also means the ATO’s focus will be on this area. 

What are classified as working from home expenses?

• Electricity expenses (heating, cooling and lighting your work area, and running your equipment).
• Cleaning costs for a dedicated work area.
• Phone and internet expenses.
• Computer consumables (printer paper and ink) and stationery.

What you can’t claim as working from home expenses:

• Cost of coffee, tea, milk, and other general household items that your employer may have provided at the office.
• Expenses related to children and their education, such as setting them up for online learning, or home schooling.
• Items that your employer pays for or reimburses you for.
• The decline in value of items provided by your employer.

How working from home deductions are calculated.

There are three ways to calculate work from home expenses. Your circumstances will dictate which is the best method for you. 

• Shortcut method
  A temporary method introduced last year; the shortcut method simplifies calculating work from home deductions. Using this method, you can claim 80 cents per hour for each hour you work from home.
  It covers all working from home expenses, including phone, internet, electricity and decline in value of equipment and furniture.
• Fixed rate method
  The fixed rate is 52 cents for each hour you work from home and covers the additional running expenses for electricity and gas, cost of repairs and decline in value of home office furniture and furnishings.
  It does not include phone, internet, computer consumables and stationery, decline in value of equipment so you need to calculate these separately.
• Actual cost method
  Using this method, you work out your deduction from actual costs you incur from working from home.

When to lodge your tax return

It’s common for the clock to tick over to July 1 and people rush to try and lodge their tax returns, but it can pay to wait (in some cases, waiting can actually pay off financially). 

The ATO will have all your information loaded by mid-July, meaning that all figures pre-filled will be accurate. You can attempt to lodge your tax return before the information is pre-filled but you will need to manually calculate everything and increase the chance of making an error. We often have clients telling us they started on their own before coming to us. 

Booking your tax return appointment

Our Swan Valley office have extended their hours from 19 July until 30 September to cater to a range of schedules. Appointments are open for booking now, so don’t wait to secure your time. 

If you’d prefer to chat with a Carbon tax agent from a different office, simply fill out our contact us form and we’ll be in touch!