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:
- shortcut method – described below
- fixed rate method
- 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.
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
- 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.