It is now common for many people to work from home, sometimes at night, sometimes at weekends and sometimes during the day. The ATO pays attention to deductions that taxpayers claim when working from home. The blog post will share eligibility for claiming working-from-home deductions.
What are the eligibility requirements for claiming working from home deductions?
To claim working-from-home tax deductions, you need to:
- Be working from home to meet your employment duties, not just doing minimal tasks, such as taking calls or checking emails.
- More expenses result from working from home.
- Have records that show incurred expenses.
What can I claim working from home?
Running expenses are related to the use of facilities within your home. These expenses are considered domestic and private expenses. You can apply to claim a deduction for additional running expenses that result from working from home. Additional running expenses include:
- Gas or electricity for cooling or heating and lighting
- Home and data or mobile internet expenses
- Home phone and mobile phone costs
- Office and stationery supplies
- The decrease in value of work-related depreciating assets includes items like:
- Office furniture (e.g., chairs and desks)
- Equipment (e.g., computers, laptops, and software)
- Repairs and maintenance for these depreciating assets.
In certain situations where you have a dedicated home office, you might also be eligible to claim:
- Occupancy expenses (such as mortgage interest or rent)
- Cleaning expenses.
If you get paid an allowance by your employer to cover your working-from-home expenses, you have to mention it as income in your tax return. If you are not sure what deductions you can claim, you can ask accountants in Melbourne.
How much can I claim for working from home?
Two methods for calculating your claim are available from 1 July 2022:
- Fixed rate method
- For additional running expenses, there are 67 cents per work hour are available
- Fixed rate doesn’t cover separate amounts for expenses, such as a decrease in the value of depreciating assets
- You don’t need a dedicated home office.
- Actual cost method
The exact expenses you incur as a result of working from home are known as the actual cost method. Using the actual cost method, you verify your deductions by calculating the precise extra expenses you incur while working from home. When you spend money for both work and personal purposes, you need to apportion your deductions on a reasonable basis. You are allowed to claim only work-related expenses as a deduction.
You have to maintain records of incurred expenses for working from home. The type of records you need to keep will depend on the method you select for calculating your claim. Moreover, if you don’t know what records you need to maintain, you can ask bookkeepers in Melbourne.
What expenses you can’t claim?
There are certain expenses you cannot claim. You are are not eligible to deduct:
- Tea, coffee, milk and other general household items, even if you get from your employer at work.
- Expenses associated with your children’s education, such as subscriptions for online learning, iPads and desks.
- Items you get from your employer, such as a mobile phone and laptop.
- Expenses reimbursed by your employer for the cost.
Conclusion
The blog outlines work from home deductions that you can and cannot claim. It is crucial to claim potential tax deductions to save more. However, if you are unsure about what deductions you are eligible for, you can ask Reliable Melbourne Accountants.