Are you an employee who works from home? You may be eligible to deduct certain work from home expenses that you incur while working at your remote office.
As a result of the impact of COVID-19, working from home has become more common and today we’ll run over some expenses you can benefit from at tax time as a result of your remote working.
Some of these expenses include the cost of your home office equipment like a desk and supplies, the cost of your phone service and Internet connection, and other similar expenses.
The Australian Tax Office has determined what specific expenses you can deduct, and how much of a deduction you are entitled to. This article will discuss the various categories of expenses you may be able to deduct.
Eligibility
Requirements: To Be Eligible For A Deduction You Must:
- Be an employee of your employer, not an independent contractor
- Have a genuine employment-related purpose for working from home
- Be incurring costs as a result of working from home
In some special circumstances you may also be eligible to claim occupancy expenses like rent or mortgage repayments.
What you can claim
There are many expenses that can be claimed as a result of working from home. These include:
- electricity expenses
- computer and office furniture e.g. desk, chair
- depreciation of equipment
- internet costs
- phone costs.
How to claim
How can I claim my expenses? Keeping records is a critical part of verifying and claiming the maximum amount possible from your income tax.
When you keep good records and present them at tax time, you should be able to claim the maximum amount of expenses allowable under the Australian Tax Office (ATO) rules.
If you have any questions about whether you are eligible to claim any of these work from home expenses, or if you have any questions about how to calculate your expenses, please contact your accountant or tax agent. They will be able to tell you exactly what you can claim and assist you in presenting the best evidence you have to support your claims.
Expenses you can’t claim
You can’t claim for the following expenses:
- coffee, tea or milk
- children’s education equipment such as iPads and desks or online learning
- items provided by your employer – e.g a laptop or phone
- any item your employer reimburses you for.
Summary
The most important consideration when working from home is to make sure you keep good records. You should keep detailed records of all your work from home-related expenses. This will include any supplies, equipment, telephone and Internet service costs you incur.
Remember, ultimately it is your responsibility to ensure you are only claiming those expenses that are allowable under the ATO rules. If you are unsure whether any particular expense is allowable, please ask your accountant or tax agent.
Other considerations would be to make sure if you are not already doing so, consider setting up some sort of bookkeeping system for your remote working costs so you can maximise your claim and be prepared with your paperwork should you require it.