What you can claim on tax after working from home in 2020-2021?

Since 2020, your normal work circumstances may have been changed. According to the Australian Bureau of Statistics (ABS), two in every five Australians work from home at least one day a week. If you are one of the many Aussies continuing to work remotely from home during the financial year 2020 to 2021, you are sure to be wondering what you can claim on tax.

Keeping tabs on what you can claim as a tax deduction may be complicated when trying to apportion how much of the electricity bill/internet/phone bill is work-related.

Should you use the shortcut method for tax deductions?

For the financial year 2020-2021, the Australian Taxation Office (ATO) has introduced an easier way to figure out how much you can claim with only basic record keeping. The ATO shortcut method can be applied to working from home the time period between 1 July 2020 to 30 June 2021. It can also be applied to the previous income year from 1 March 2019 to 30 June 2020 should for some reason you haven’t lodged a tax return for the previous financial year.

The ATO has reiterated that they will be paying careful attention to deductions this year to people who are trying to claim expenses they’re not entitled to. For example, if you work from home, they will be making sure you are not deducting travel expenses or laundering costs for uniforms.

What is the shortcut method?

You can claim 80 cents per hour that you worked from home. By using this method, it covers everything from electricity to phone use and you can’t claim for any other expenses. You don’t need to keep overly detailed records, but you must be able to show the hours worked from home, such as diaries, timesheets or rosters. Using this method might not necessarily give you the best return, but it certainly is the most straight-forward.

If you don’t use the shortcut method, what can you claim on tax a tax expense?

Before you try to claim for tax deductions, the following three rules apply for standard claims.

1) Any expenses you claim for must not be reimbursed or paid for by your employer
2) Any expenses must have been paid for by you
3) Any deductions must be related to your work.

Need more ideas about the type of things you can claim for working from home?

1) Cleaning your office area. If you hire a cleaner, you can only claim for the workspace portion of your cleaning bill, not your entire house. If you purchase spray and wipe and clothes, specifically for cleaning your office area you can claim for those. Don’t forget to keep receipts.

2) Electricity required for lighting, air conditioning and heating appliances that heat your workspace area. Sorry, this is not designed so the government pays for your entire electricity household electricity bill.

3) Mobile phone, landline, and internet costs. The amount you claim must be work-related costs. You will need to figure out what portion of the internet and phone calls are related to work such as talking to work-colleagues, phone conferences and zoom calls with clients.

4) Depreciation of home office equipment like laptops, computers and printers and office consumables such as paper, stationery, printing ink.

5) Home office furniture. You can claim up to $300 of the full cost or decline in value for home-office items that cost more than $300 on your tax return.

Get what you’re owed this tax time if you are working from home by consulting a certified taxation accountant. The end of the financial year is looming, so be sure to get your tax affairs in order and make an appointment.

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