Working from home claims shortcut could leave you up to $1000 out of pocket, accountants warn
Accountants are warning the new 80c per hour work from home deduction shortcut is for the “lazy” and could leave you up to $1000 short.
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Australians rushing to claim the new 80c per hour rate for working from home should consider other options because it might leave them better off.
The Australian Taxation Office will now allow people to claim a flat rate of 80c per hour for all their working from home expenses after March 1, rather than adding up all their individually outlaid costs.
For a person working a typical 38-hour week, this flat rate would equate to a claim of $30.40 per week.
But there are other options workers can adopt to get money back in their own pockets. These include:
• Claim 52c per work hour for heating, cooling, lighting, cleaning and the depreciation of office furniture, computer or similar device plus adding on the work-related portion of phone and internet expenses, computer goods and stationery.
• Claim the actual work-related portion of all your running expenses, which need to be calculated on a reasonable basis.
• See if your employer offers a working-from-home allowance – this needs to be included as taxable income and then you can still claim deductions on top of this.
The principal of Mr Taxman, chartered accountant Adrian Raftery, said the 80c method was “designed for those who are lazy with their tax” and warned it might leave them more out of pocket.
“People should do all their records, keep a log of their mobile phone calls and all the expenses they have incurred in terms of setting up the office,” he said.
“When it comes to tax time, compare the pair. Look at what your actual spend was and compare it to the 80c per hour.”
However, Dr Raftery conceded using other methods other than the 80c method involved “a bit more legwork”.
“It could be as much as $1000 differential for some people,” Dr Raftery said.
“It’s a little bit of work but if you are going to get extra money or anything extra in your tax return at year end we all know how important money is and every dollar counts.
“It could pay for your groceries for a few weeks.”
ATO assistant commissioner Karen Foat said if you were using the 80c method you did not need to worry about the hassle of keeping lots of records.
“But if people are making a big purchase they should keep the receipt if they want to claim depreciation for the future,” she said.
“In order to claim some sort of deduction it’s really important people have had some sort of cost and they haven’t been reimbursed by their employer. They need to have spent some additional money.”
Ms Foat said people claiming the flat 80c rate should keep a log of the hours they were working from home, whether it be in the form of a logbook or in an Outlook calendar.
EXPENSES YOU CAN’T CLAIM
• You cannot claim occupancy expenses as mortgage interest, rent and rates.
• You cannot claim the cost of coffee, tea, milk and other household items your employer would normally provide you at work.
• Visit ato.gov.au for further information.