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Claiming Work-From-Home Expenses in Australia: What You Need to Know

Working from home has become increasingly common in Australia. With many businesses adopting flexible work arrangements, understanding how to claim work-from-home expenses is crucial. This blog post will guide you through everything you need to know about claiming work-from-home deductions on your Australian tax return.

Eligibility for Work-From-Home Expense Claims:

The Australian Taxation Office (ATO) allows you to claim deductions for additional running expenses you incur due to working from home. However, to be eligible, you must meet the following criteria:

  • You must be working from home to fulfil your employment duties, not for occasional tasks like checking emails.
  • You must have incurred additional running expenses as a result of working from home.
  • You must have records to demonstrate these expenses.

Choosing a Calculation Method:

The ATO offers two methods for calculating your work-from-home deductions:

  • Fixed Rate Method: This simplified method allows you to claim a flat rate of 67 cents per hour worked from home for the 2022-23 income year. This rate covers expenses like electricity, internet, phone calls, stationery, and depreciation of home office equipment.
  • Actual Cost Method: This method involves calculating the work-related portion of your actual running expenses, such as electricity bills, phone and internet charges, and depreciation of dedicated office furniture and equipment. It requires more detailed record-keeping but can potentially lead to higher deductions.

What Expenses Can You Claim?

Several expenses are potentially claimable under both methods, but the calculation method determines how you claim them:

  • Phone and internet expenses: You can claim the work-related portion of your phone and internet bills.
  • Electricity and gas costs: You can claim a portion of your electricity and gas bills based on the percentage of time you use them for work purposes.
  • Depreciation of home office furniture and equipment: You can claim the decline in value of dedicated furniture and equipment used for work.
  • Stationery and printer ink: You can claim the cost of consumables used solely for work purposes.

Important Considerations:

  • Occupancy costs (rent, mortgage interest) are generally not claimable for employees working from home.
  • Expenses reimbursed by your employer cannot be claimed in your tax return.
  • Keep detailed records of your work-from-home expenses, including receipts, bills, and a log of your work hours.

Benefits of Claiming Work-From-Home Expenses:

Claiming work-from-home expenses can significantly reduce your taxable income and increase your tax refund. This can be particularly beneficial for those with dedicated home office setups or high electricity usage due to work.

Understanding how to claim work-from-home expenses can help you maximise your tax return. By carefully considering your eligibility and choosing the appropriate calculation method, you can ensure you're claiming all the deductions you're entitled to. Remember, the ATO website offers comprehensive resources and a work-from-home expenses calculator to assist you further.

At Mastered Tax and Accounting, we understand the complexities of tax law and are passionate about helping individuals and businesses maximise their refunds while ensuring compliance. Let our experienced team of tax professionals handle your tax return, so you can focus on what matters most. Contact us today to discuss your specific tax situation and see how we can help you achieve your financial goals.

Disclaimer: This blog post is intended for general information purposes only and does not constitute financial or tax advice. It's recommended to consult a registered tax agent for personalized advice on your specific circumstances.


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