Due to COVID-19, the ATO have implemented different Home Office deductions from March 2020 to June 2020. These deductions are calculated 1 of 3 ways.
- Shortcut method. 80c per hour worked from home.
- This is to cover ALL expenses, including: Phone expenses, internet expenses, furniture depreciation, electricity, gas and stationary costs.
- You can’t claim additional expenses in relation to working from home.
- Fixed rate method. 52c per hour worked from home.
- This is to cover furniture depreciation, electricity, gas and repairs to any office equipment.
- You can claim additional expenses such as phone, internet, stationary separately.
- You must have a dedicated office area in your home.
- You must keep a 4-week diary showing the work completed from home.
- Actual cost method.
- This is to cover all direct costs incurred from working from home.
- Under this method you must keep a record of all costs incurred. This includes keeping a diary of all work completed and costs incurred.
- You must have a separate home office area. This method is not applicable if another family member is also using the area (including watching tv).
- A reasonable work portion must be calculated for all deductions.
Depending on the individual’s situation will depend which option will provide the best outcome. Our recommendation is to keep all of your records, receipts, bills and record the work you have completed daily. The more documentation you have, the more likely you are to have more deductions and receive a higher refund. If you don’t have copies of your receipts, we recommend pay on card as your bank statement is sufficient.
If you aren’t sure about which is the best method for your situation please don’t hesitate to call our team or book in your tax appointment.