When doing your tax return this coming FY2020 years, many people will claim the cost of working from home as work expenses to offset the tax from the Australian Taxation Office (ATO). In this article, we will talk about work from home tax deduction.
Coronavirus in Australia is getting more and more severe. The number of confirmed infections is 2799, while in New Zealand, the infections are 1293. The mortality rate is 11. In the world, the number of infected people is more than 48,702. The death was 22,020.
Due to the coronavirus crisis, the Australian government encourages or may force everyone to work from home.
From the website of the Australian Taxation Office, we can see that there are two types of expense substantiation methods for working from home, one requires an invoice and a diary to work out the work-related percentage, and one does not require an invoice, but requires a diary for the first month of the year.
The Australian Taxation Office said that those who need to claim these costs in the tax return need to keep detailed records so that they can be deducted from income received in tax returns for the FY2020.
The simplest is to use the “Cents Per Hour” method. In this case, the ATO allows a flat rate of AUD 52 cents per hour to pay for home office running expenses on heating, cooling, lighting, and furniture value without having to keep details of actual costs.
These are the operating expenses of the Home office running expense. It is also important to note that you need to have a dedicated working area at home in order to be able to claim the home office running expense, without a dedicated working area at home, you might not be able to do so.
You need to record the number of hours you use the home office and multiply it by AUD 52 cents per hour. For this method, you need to keep a diary for the first month of the year, and pro-rata to the rest of the year.
You can also claim using actual expenses mobile phone costs, internet, computer depreciation and stationery costs, and depreciation costs for any computer or other equipment. These require supporting documents, such as proof of paid invoices, and you need to be the one who had spent the money to pay for it.
If it is mobile phone expenses, internet expenses, or computer depreciation expenses, you need a monthly diary in the first month of the financial year to record the proportion of your work. The final reported cost is the total cost multiplied by the proportion.
You can also deduct the actual electricity, gas, telephone, and internet fees, but you need to keep the invoices, and the names of these invoices must be yours, not others, and you need to prove that you paid the money And not someone else paying. In addition, you also need to keep a diary and keep a record of your workplace and the proportion of all places.
The second method of claiming the deduction is actual operating costs, which keeps a diary of expenses that can be incurred by ATO requirements.
The diary needs to detail how much time you spend in your home office and work-related time.“
In both methods, this usually results in larger deductions, which can be helpful for your tax refund, but the requirements for record-keeping are much stricter.
In some special cases, if you run a small business at home, you can claim more than the running expense of your house, you can also deduct the cost of owning the house, such as rent, land tax, home loan interest, and council rate.
However, you must be aware that if you do this, you may have to pay Capital Gains Tax when selling the house. If you want to deduct these costs, you must clearly record the size of your workplace and the overall ratio compared to the whole building, and then multiply the total time you work from home.
Many workers have laptops or phones provided by employers when they work from home. If this is the case, the cost of these computers and laptops is not claimable.
About a third of taxpayers do their own tax refunds. They should use tax accountants and accountants to help them enhance or maximize their tax refunds. The fees you pay to accountants can be 100% deductible in the next financial year, this is especially relevant when you start to claim home office running expenses, you need a good tax agent or accountant to ensure you are doing the right thing, and you are in position to maximize the tax refund.
We are here to help you, and we are giving a special discount to people who would like to book the tax return service for FY2020, we are giving 15% discount to those who book the service with us at the moment, and paid the 10% deposit fee. Please enter your detail below: