Around one in four Australians are now working from home due to the coronavirus outbreak. For many of us, this means an extra hour of sleep each day and the freedom to check work emails in our pyjamas.
But arguably, the most important perk to working remotely is the ability to claim relevant expenses at tax time. That extra monitor or office chair you purchased for your home office set-up? Tax-deductible. Your additional broadband or mobile usage while working from home? Also tax-deductible.
Although June 30 is still a while off, it’s important to keep tabs on your expenses and monitor your broadband and electricity usage so you can be reimbursed. Below are the details on what you can claim and how to get started.
Home office expenses
Many of us have had to purchase extra office equipment to set up for the long haul, with Officeworks reporting a spike in sales across products like monitors, printers and standing desks.
Below is a list of eligible expenses that you can claim while working from home:
- Home office equipment. This includes things like printers, telephones, computers and furniture. You can claim for the full cost of the item (up to $300) or the decline in value for items worth more than $300.
- Energy and Internet bills. You can claim a portion of your electricity bills for heating, cooling and lighting costs, along with Internet and mobile usage.
- Repair costs. This includes repairs to home office furniture and fittings.
- Cleaning costs. You may be able to claim for cleaning expenses if you can show proof that they relate to your office space.
Internet and mobile bills
As long as you’ve been using your home Internet and mobile for work-related purposes, you’re eligible to claim a portion of your usage back on tax.
For your Internet usage, you’ll need to estimate what percentage is used for work purposes. For instance, you might decide this figure is around 20%.
From here, calculate 20% of your monthly Internet bill. Multiply this amount by 12 to give you a figure for the year, or by the number of months that you’ve been working from home. This is the amount you’ll be eligible to claim. You can also check through an online data usage calculator.
Claiming for your mobile usage is similar. Work out what percentage of your phone calls and data are used for work (for instance 40%). Repeat the calculation process like you would for your Internet usage.
Remember, you can only claim a tax deduction for the portion of bills relating to work, not personal use. You’ll need to provide proof of your calculations to the Australian Tax Office (ATO) and fines may apply if you can’t provide adequate evidence.
With this in mind, it’s a good idea to keep records of your phone and Internet bills or log your usage times in a notebook in case your tax return is audited.
80 cents per hour shortcut method: A new way to claim
Due to increased numbers of people working from home due to coronavirus, the ATO has introduced a shortcut to simplify the claiming process. As part of this process, remote workers can claim 80 cents per working hour for all their work-related running costs between March 1 and June 30.
To be eligible to claim this way, you need to meet the following criteria:
- You’re working at home because of coronavirus. If you’ve still been going to the office, you don’t qualify (unless you’ve been working partial hours from home as well).
- You had to foot the bill for these costs yourself, and you haven’t been reimbursed by your employer.
- You’ve kept a record of the hours you’ve worked. This can include payslips, a diary log, timesheets, etc.
What about expenses you can’t claim?
If you’re working from home due to coronavirus, you won’t be able to claim on your mortgage payments, rent or council rates.
You can also forget about claiming for the cost of coffee, milk, tea and other general household items your employer may have provided you with at work– that packet of Tim Tams is coming from your own pocket!
Women Love Tech would like to thank Bessie Hassan for her article.