Covid-19 is changing so much in our lives.

A lot of you are now working from home, when you weren’t previously.

A logical question then becomes: What expenses can I claim, now that I’m working from home?

We’ve got you covered…

Calculating running expenses

There are three ways you can choose to calculate your additional running expenses:

1. shortcut method – described below
2. fixed rate method
3. actual cost method

For more information on how to calculate and claim a deductions under methods 2 & 3, see Home office expenses  or call us on (02) 8814 5677.

 

Shortcut method

You can claim a deduction of 80 cents for each hour you work from home, due to COVID-19, as long as you are:

• working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls,
• incurring additional deductible running expenses as a result of working from home.

You do not have to have a separate or dedicated area of your home set aside for working, such as a private study.

The shortcut method rate covers all deductible running expenses, including:

• electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses
• the decline in value and repair of capital items, such as home office furniture and furnishings
• cleaning expenses
• your phone costs, including the decline in value of the handset
• your internet costs
• computer consumables, such as printer ink
• stationery
• the decline in value of a computer, laptop or similar device.

You do not have to incur all of these expenses, but you must have incurred additional expenses in some of those categories as a result of working from home due to COVID-19.

 

If you use the shortcut method to claim a deduction for your additional running expenses, you cannot claim a further deduction for any of the expenses listed above.

You must keep a record of the number of hours you have worked from home as a result of COVID-19. Examples are timesheets, diary notes or rosters.

 

If you use the shortcut method to claim a deduction, please remember to let us know when its time to prepare your 2019-20 tax return as we must include the note ‘COVID-hourly rate’ in your tax return.