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Maximizing Your WFH Tax Deductions: A Guide for Australian Taxpayers


Following the outbreak of the COVID-19 virus, many Australians have started conducting their careers from the comfort of their own homes. You could be eligible for tax breaks if you're one of the millions of people who have been telecommuting.


Changes made by the Australian Taxation Office (ATO) make it easier for taxpayers to deduct home-based business expenses.


Specifically, here is what you should know:



What expenses can you claim for (WFH) Working From Home?


What expenses can you claim for working from home?

If you're an employee who has been required to work from home, you may be able to claim deductions for the following expenses:


1. Home office expenses

  • Home office running expenses such as electricity, gas, and internet

  • Depreciation on home office equipment, such as computers and printers

2. Work-related phone and internet expenses

  • A portion of your phone and internet expenses that are used for work purposes

3. Other work-related expenses

  • Stationery, computer consumables, and home office equipment repair costs

 

How do you calculate your tax deductions?


There are two methods you can use to calculate your home office expenses: the Shortcut Method and the Actual Cost Method.


1. Shortcut Method

The Shortcut Method is the easiest and simplest way to calculate your home office expenses. You can claim a rate of 80 cents per hour for all of your running expenses. This includes electricity, gas, internet, and phone expenses.

2. Actual Cost Method

If you want to claim your actual expenses, you'll need to keep a record of your home office expenses. This can be done by keeping receipts and invoices for all of your running expenses. You can then claim a percentage of your expenses that are related to work. This includes the portion of your electricity, gas, and internet bills that are used for work.


 

How do you claim your tax deductions?


You can claim your home office expenses when you submit your tax return. If you're using the Shortcut Method, you'll need to include the number of hours you worked from home in your tax return.


If you're using the Actual Cost Method, you'll need to keep a record of your expenses and provide this information to your accountant when you submit your tax return.


It's important to note that you can only claim tax deductions for expenses that are related to your work. If you're using your home office for personal use as well, you can only claim a portion of your expenses that are related to work.


In conclusion, if you've been working from home, you may be eligible to claim tax deductions for some of your expenses. Make sure you keep records of your home office expenses and talk to your accountant to find out what you can claim. It's important to take advantage of these tax deductions to help offset some of the costs associated with working from home.


Check our recent post on full information regarding the recent changes made by ATO re the WFH deductions.

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If you're interested in learning more or discussing these topics in more depth, we would love to hear from you! Feel free to reach out to us at info@lyndengroup.com.au or give us a call at (03) 8548 1843. We're always happy to chat and offer any guidance or support we can.


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