Tax season is here! As specialists in individual tax returns, our goal is to help you optimize your tax position. We work closely with clients to ensure they claim every legally entitled deduction, including work from home tax benefits, to maximize their refunds.
Increased Tax Deductions for Home Office Expenses
The Australian Taxation Office (ATO) introduced a generous work-from-home tax deduction under the COVID-19 regime. Many employees had to work remotely, relying on personal resources to meet work demands.
From 1 July 2020, the ATO allows claims of up to 80 cents per hour for home office expenses—a 54% increase from the previous 52 cents per hour. Multiple people in the same household can claim this deduction, making it even more beneficial.
For example, working 40 hours per week from home could entitle you to a $768 deduction over 24 weeks (from March to June 2020).
What This Covers
The simplified method applies from 1 March 2020 to 30 June 2020, with potential extensions under review. Some large companies are even considering permanent remote work arrangements.
This new method covers all deductible running expenses, including:
- Electricity for lighting, heating, and cooling
- Phone and internet costs
- Depreciation of a computer, laptop, home office furniture, and furnishings
Keeping Proper Records is Essential
To claim the home office deduction, maintain a proper timesheet or diary. The ATO requires:
- A record of total hours worked from March to June
- Exclusion of break times (e.g., meals, rest, or personal activities)
- No need for a dedicated home office space
ATO Assistant Commissioner Karen Foat emphasized the shortcut method simplifies tax filing.
“The shortcut method provides a rate of 80 cents per hour and will only require you to keep a record of the number of hours worked from home.”
Alternative Methods for Home Office Deductions
Besides the shortcut method, there are two other ways to claim work-from-home expenses:
- Fixed Rate Method (52 cents per hour) – Covers running expenses but requires separate claims for phone, internet, and depreciation.
- Actual Cost Method – Allows claims for specific expenses but involves detailed calculations.
Choosing the best method depends on your expenses and records.
Example: Bianca’s Work-From-Home Tax Claim
Bianca, a copywriter, started working from home on 16 March 2020. She purchased a new laptop, desk, chair, and stationery and incurred higher electricity, phone, and internet costs.
- Using the shortcut method, she can claim 80 cents per hour without itemizing expenses—only a timesheet is required.
- With the fixed rate method, she can claim 52 cents per hour plus depreciation on her laptop and office supplies.
Need Expert Help?
Ensuring your tax return is accurate and optimized requires professional guidance. Our experienced team in Sydney and Adelaide can help you claim the best possible refund.
📞 Call us today at 0410 829 900 to maximize your tax return!
