In 2022-2023, there will be work from home deduction changes that will impact employees working remotely. These changes affect the expenses they can claim. This blog post will explore the upcoming changes and their implications for remote workers. Given the current economic conditions, it’s essential to understand your entitlements for deductions. For assistance, you can rely on EndureGo Tax, the leading CPA accountant in Inner West Sydney, Belrose Northern Beaches, and Adelaide.
What is the work from home deduction?
If you work from home, you can claim work-from-home office expenses through three methods: actual cost, fixed rate, and shortcut method, introduced during the COVID-19 pandemic.
The shortcut method uses 80 cents per hour and doesn’t require proving specific work areas, but excludes certain expenses like mobile phone and internet costs. The fixed rate method uses 52 cents per hour and requires evidence of a designated work area and a diary to track hours worked.
How has the work from home office expense deduction changed in Fy2023?
From 2022-2023, the Australian Taxation Office has scrapped the shortcut method, instead, it has introduced the
1. Revised fixed rate method
2. Actual cost method.
The actual expense method is remained unchanged.
What is the revised fixed rate method
A revised fixed rate method is as follows:
1. 67 cents per hour worked from home, up from 52 cents
2. Does not require a dedicated home office
3. Allows you to claim and Calculates the claim for
Gas and electricity
Internet and phone usage
Consumables for computers
4. allows taxpayers to separately deduct the work-related decline in value of depreciating assets such as office furniture and technology.
Can small businesses working from home be able to claim it
Business owners who work from home can use the revised fixed rate method to calculate their home-related business expenses. If you are a small business owner using your home as your office, reach out to the leading CPA accountant in Inner West Sydney, Belrose Northern Beaches, and Adelaide to explore how you can claim these work-from-home office expenses.
How do I qualify for the work from home office expense deduction
If your client plans to use the revised fixed rate method for their 2022-23 tax return, they need to:
- From 1 July 2022 to 28 February 2023 – maintain a record of the hours they worked from home.
- From 1 March 2023 to 30 June 2023 – keep a record of the total number of hours worked from home (timesheet, roster, or diary) and evidence of expenses covered by the fixed rate method (e.g., phone or electricity bills). They should also keep records of any equipment purchased for working from home, including details of the supplier, cost, and acquisition date.
What work from home office expenses can I claim during FY2023
If you plan to use the revised fixed rate method for your 2022-23 tax return, follow these steps:
- From July 1st, 2022, to February 28th, 2023 – record the hours you worked from home.
- From 1 March 2023 to 30 June 2023 – list the total number of hours worked from home, including any additional expenditures related to the Fixed Rate method. Also, list the costs associated with work equipment, both new and used, such as technology or furniture.
How to Contact Us
This financial year, prepare for the significant changes in work from home deductions, effective in FY2023. Our professional business development officer will contact you. @Enduregotax specializes in helping small to medium-sized businesses improve and save money in their accounting and tax areas. For more information, visit www.endego.com.au.