Last financial year saw many people swap their daily work commute in the car or on public transport to a commute from bed to the kitchen table. If you spent time working from home, you may be allowed to claim deductions to help cover some work from home expenses, but it’s important to remember to keep the correct records if you are considering making any claims. If you’re still working from home this income year, make sure you are recording the hours you work from home and keep all your receipts of items you buy. Keeping all your records now will allow you to choose the method that will give you the best outcome next tax time.
The Australian Taxation Office offers detailed advice and information for you to consider before making any claims.
Working from home
When claiming the additional running costs you incur while working from home (such as electricity and home office equipment) the types of records you need to keep depends on the method you use to work out your claim –
shortcut method, fixed rate method or actual costs.
If you are using the shortcut method (80 cents per hour worked from 1 July 2020) keep a record of the total hours worked from home by keeping your timesheets, rosters, diary or other similar record. As you can’t claim any additional expenses,
you do not have to keep any receipts or other records.
If you are using the fixed rate method (52 cents per hour from 1 July 2020), either keep records of your actual hours spent working at home for the year or keep a diary for a representative four-week period to show your usual pattern of working at home. Also keep receipts for expenses not covered by the rate per hour and evidence showing how you determined the work-related portion of those expenses.
If you are claiming the actual costs you have incurred, keep your receipts or statements for all expenses you incurred and capital items you purchased (for example, stationery, desk, electricity and gas).
You can’t claim a deduction for the following expenses if you’re an employee working at home:
- coffee, tea, milk and other general household items your employer may provide at work
- equipment you buy for your children’s education – for example, iPads and desks
- items your employer provides – for example, a laptop or a phone
- any items where your employer pays for or reimburses you for the expense.
Phone and internet expenses
Claiming $50 or less
If the work use of your phone is incidental, and you are not claiming a deduction of more than $50, you may make a claim based on
■ 25 cents for each work call made from your landline
■ 75 cents for each work call made from your mobile
■ 10 cents for each text message sent from your mobile.
Claiming more than $50
To claim a deduction of more than $50 you must:
■ keep all your phone and internet bills for the year
■ show how much is related to work.
If your bills are itemised
For your phone expenses, highlight all your work-related calls in a representative four-week period which can then be applied to the full period. You can determine the work-related percentage by dividing the number of work calls by the total number of calls in that four-week period or the amount of time spent on work calls by the total time spent on all calls in that four-week period.
For your internet expenses, you can keep a diary covering a representative four-week period showing how often you, and other members of your household, use the internet for work and personal purposes. This can be based on the time spent or the data used by you for work purposes compared to your personal usage and that of all members of your household. This pattern of work use can then be applied to the full working period.
If you have a bundled plan, you need to apportion the total cost of the plan between the services covered before determining your work-related use of each service. This can be done based on the supplier’s cost or a comparable supplier’s cost of each
Record Keeping Tips
The records you keep don’t have to be in paper form. Records made and stored electronically are recognised as documents – this includes photos of your receipts. Keeping track of your records on the go is easy with the myDeductions tool in the ATO app.
The free tool makes it easier and more convenient to keep records of your expenses and income in one place, including photos of your receipts and invoices.
In myDeductions you can keep records of:
■ any work-related expenses (including car trips)
■ interest and dividend deductions
■ gifts or donations
■ cost of managing tax affairs
■ other deductions.
Then, at tax time, you can upload your records into myTax or send them to your agent.
For information and direct advice on deductions and claims visit Australian Taxation Office.
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