How to claim tax deductions if you’re working from home

AS millions of Australians bring their work home, it’s creating opportunities for handy tax deductions — and now is the time to do it.

AS millions of Australians bring their work home, it’s creating opportunities for welcome tax deductions — and now is the time to spend.

Australian Bureau of Statistics data has shown that about half of the workforce uses the internet for home-based work, while several other studies have reported a rapid rise in home offices.

It’s estimated that at least one-third of Australians work regularly from home, and NDA Law managing director Andrea Michaels said this reflected changing work patterns and fewer traditional office jobs.

“It’s more work from home, subcontracting and consulting work,” she said.

Home office expenses can add up, and can boost your tax refund this year. Picture: Supplied

This means greater potential for people to claim deductions for the work-related portion of energy costs, phone use, computers, internet connections, stationery, desks, chairs and other home office furniture.

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Expenses paid in late June can become tax deductions from July, and small business owners can claim an immediate upfront deduction for any purchase below $20,000.

Regular workers can claim instant deductions for purchases below $300, or write down the value of more expensive items over time.

“Unless they have their own small business at home and are working 40 hours a week in the home office, most people won’t keep the paperwork or diary entries to satisfy the ATO,” Ms Michaels said.

Many home office users might be safer using the ATO standard deduction of 45c per hour to cover heating, cooling, lighting and the decline in value of furniture, she said.

“The ATO is targeting mobile phones and internet use this year. They have seen a big spike in how much people are claiming.”

People should also not claim for work-related items where their employer had reimbursed them, Ms Michaels said. “You can’t double dip.”

The Australian Taxation Office is targeting work-related phone deductions this year.

ATO assistant commissioner Kath Anderson said workers should remember that they could only claim the work-related component of expenses and depreciation.

“You need to exclude costs related to private use,” she said.

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“You may be eligible to claim phone and internet usage where required by your employer. If you only use your phone and internet for work occasionally, you can make a claim of a reasonable estimate of your costs up to a maximum of $50 without the need to keep detailed records.

“If you are claiming over $50, you’ll need more detailed records and possibly a diary to show your business use.”

Ms Anderson said there were three golden rules for work-related expenses claims:

• You must have spent the money yourself and weren’t reimbursed;

• It must be directly related to earning your income, and;

• You must have a record to prove it.

@keanemoney