Are You Working from Home?

If yes, do you know what expenses can you claim as tax deductions?

If yes, do you know how much ?

We know that tracking these expenses can be challenging, so from 1 March to 30 June 2020, the ATO has introduced a temporary shortcut method to make our life easier.

It’s a simple way to calculate these expenses with minimal record keeping requirements.

In most cases, if you are working from home as an employee, there will be NO capital gains tax CGT implications for your home.

There are 3 ways of calculating home office expenses depending on your circumstances.

The methods are the:

Shortcut Method (80 cents) – Only available 1 March to 30 June 2020

Fixed Rate Method (52 cents)

Actual Cost Method

For the shortcut method, you can choose to use this rate if you are working from home to fulfil your employment duties and you have incurred additional running expenses as a result of working from home.

The shortcut method covers all your work from home expenses, such as:

Phone Expenses.

Internet Expenses.

The Decline in Value of Equipment and Furniture.

Electricity and Gas for Heating, Cooling and Lighting.

If you use this method, you can’t claim any other expenses for working from home.

You don’t need to have a dedicated work area to use this method. However, you must keep a record of the number of hours you have worked from home.

This could be a timesheet, roster, a diary or documents that set out the hours you worked from home.

Stay tuned for more information on the other two methods.