Suitable for: Anyone who is working from home

Tax Difficulty: Beginner

Airtax Experience: Anyone

Time to read: 3-5 minutes

Key Working From Home Tax Questions

1. What Working From Home (WFH) Tax Deductions Can I Claim?

In a nutshell, if you are working from home as an employee, you may be able to can claim the following:

• Work related phone and internet costs
• Your work area utilities such as gas and electricity
• The full cost (if up to $300) OR depreciation of home office purchases (such as desks, chairs, computers and monitors)
• Depreciation of fixtures and fittings in your work area 
• Cleaning costs of your work area
• Other running expenses including computer consumables (e.g. printer paper, ink and stationery)

Unfortunately you can’t claim your mortgage*, rent*, tea bags, coffee or lunches!

The other consideration you’ll need to apply is whether you have your own dedicated space for working or not (i.e. a separate home office or space). This will impact exactly what expenses you can claim.

Update: with the ATO’s announcement of the new ‘shortcut method’, a dedicated workspace is not required to claim 80 cents per hour fixed rate. This method is only valid for working from home expenses incurred between 1 Mar - 30 Sep 2020. Learn more here.

All these items can be reviewed in more detail in our articles such as what working from home (WFH) expenses are tax deductible. 

2. How Do I Calculate WFH tax expenses?

Update: this section has been updated to include the ATO’s new ‘shortcut method’ to claim working from home tax expenses.

The ATO allows two ways to calculate your deductions, one simpler than the other:

• You can claim the 'shortcut' method of 80 cents per hour that includes all of your home office expenses for 1 Mar - 30 Sep 2020
• You can claim a fixed rate of 52 cents per hour, e.g. the number of hours that you work from home in the tax year multiplied by 52 cents.
• You can calculate your actual expenses, e.g. by working out the amount of actual expense (e.g. phone and internet costs) you used whilst working from home

3. What Records Do I Need to Keep For WFH Tax Deductions?

As you probably know, keeping records is important for your income tax return, and this includes home office expense claims. There is more information on record keeping in both the articles around what you can claim and how you calculate your home office expenses. 

Still unsure?

If you still have any questions about the Airtax BAS to income tax return migration function, or if you would like to know more about ways you can optimise your tax position, you can schedule a time to speak with one of our accountants. Check out our phone support services below to find out more:

1. Tax Assist: if you have particular questions about the sole trader section of your return, including migrating your BAS into your tax return, this 30-minute phone call might suit you. $179 includes a 30-minute phone call and one free income tax return lodgement. 
2. Tax Professional: our most comprehensive income tax return support service. If you need a detailed walkthrough of an entire tax return with a dedicated accountant, from start to finish, including migrating your BAS into your tax return, Tax Professional is perfect for you. $349 gets you maximal support, including a follow-up phone call where necessary, and includes a free income tax return. 

Feedback from our users suggests that Airtax phone support is a great way to get peace of mind knowing that you’re lodging correctly as a sole trader, and can help you find any deductions you may not have known you could claim. 

Footnote

*There are a very limited number of situations where you may be able to claim deductions for occupancy expenses (e.g. rent or mortgage interest) as an employee. You can read more about it on the ATO website here. We have included the summary information direct from ATO below:

Employees are generally not able to claim occupancy expenses. You can only claim the work-related proportion of your occupancy expenses in two very limited circumstances where:

• The space in the home is a place of business, and not suitable for domestic use – for example, a doctor or dentist surgery or a hairdresser studio in the home
• No other work location is provided to an employee by an employer and the employee is required to dedicate part of their home to their employer's business as an office – you can claim the portion of these costs that relate to a clearly identified place of business.

This document merely provides a broad outline of the subject and is necessarily general in nature.  If you require specific advice, which is tailored to your specific circumstances, please do not hesitate to contact us (fees would apply).