Claiming deductions for working from home to be made easier

The ATO are announcing a ‘working from home shortcut’ measure for people to claim running expenses, now they are working from home due to Covid-19 restrictions.

The new measure will allow people to claim a set rate of 80 cents per hour working at home. This provides a more straightforward system for people, without the need to calculate specific running expenses or to have a dedicated ‘work from home area’.

The measure will apply to work after March 1. Claims for expenses incurred prior to March 1 will still follow the normal existing rules. People who already work from home can continue to use existing deduction arrangements.

For the period of March 1 to June 30, there are three ways to calculate home office expenses:

  1. Claim a rate of 80 cents per hour worked, to cover all expenses.
  2. Claim a rate of 52 cents per hour worked for heating, cooling, lighting, cleaning and the decline in value of office furniture, plus calculate the work-related portion of your phone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device.
  3. Claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis.

Note: taxpayers must have spent this money yourself and not have had expenses reimbursed. The claim must be directly related to income and you will need a record to support your claim.

What do you need to do now?

The ATO will announce further details of this special arrangement. In the meantime, keep a record of the hours you work from home. You will need this as evidence when making a claim.

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