What Tax Deductions Can I Claim While Working From Home?

The workforce in Australia has undergone a massive shift in recent times due to the global outbreak of COVID-19. One of the biggest changes is that many of us are now working from home. This new socially distanced approach to work is much more convenient than commuting to an office in many ways – but it also comes with a lot of additional expenses.

There's a possibility you'll need to use your personal mobile phone and laptop to work from home, putting extra strain on your utilities (such as electricity), and maybe even having to invest in special equipment or office furniture so you can work remotely. The good news is that all of this is tax deductible.

Who can claim tax deductions when working from home?

Any individual employee (as opposed to a small business owner with a home office) can claim tax deductions on working from home related expenses if they:

• Have personally spent money on the expense (which means it was not paid for by their employer)
• Are claiming for an expense directly related to earning income and work related tasks
• Have documentation to support their claim

Which expenses can I claim?  

There are a wide range of expenses you can claim when working from home, including:  

• Heating, cooling, lighting and cleaning of the area you are working in
• Phone and internet services
• Consumables such as printer ink, stationery or paper
• Home equipment such as a printer, chair, desk, screen or computer – for these items, you can either claim the full cost (up to $300) or the decline in value (items over $300)

What can't I claim?  

Unfortunately not all expenses relating to your temporary home office can be claimed. Examples of items you can't claim include:

• Your rent or mortgage interest
• Water or council rates
• Snacks or refreshments
• Costs related to children, their education or childcare
• Anything for which you are reimbursed by your employer, or that is provided by your employer

How do I calculate my expenses?

Depending on your circumstances, figuring out your expenses can be a complicated process – but luckily the ATO have implemented a shortcut method to cover the period from 1  March 2020 to 30 June 2021. During this time you claim a deduction for $0.80 per hour of documented work, and this covers all deductible running expenses. But note that, if you use this method, you cannot claim any other expenses for working from home for that period.

The alternative is to claim the actual work related portion of all your running expenses, which you will need to calculate on a reasonable basis. This is a considerably more labour intensive process and requires careful documentation of all expenses, but it will often produce a bigger claim and is best calculated with help from your tax agent. To find out more about what to record and keep check out this article.

Still have some questions about what you can deduct when you're working from home? Talk to H&R Block. Our experienced tax consultants will be able to help. Call 13 23 25 for details or find your nearest office and book an appointment online.