“Due to Covid-19, I have been working from home for the last 8 months. Can I claim any expenses for my home office like power costs and equipment? Can I access any support to upgrade my internet to meet work needs?”
- Question from Roberto in Sydney
Top answer provided by:
Now, first off, I’m not a tax accountant, and accordingly, I, like other financial planners, are a bit restricted in the advice we can provide.
So first off, “Can I access any support to upgrade my internet to meet work needs?”
If I’ve interpreted this part correctly, I wouldn’t be the best person to ask. Personally, I’d have a chat with your service provider to see what options for connection upgrades are available for your particular area. Then work with your employer who may cover some or all of the costs involved.
Finally, I would suggest contacting either former Prime Ministers Kevin Rudd or Malcolm Turnbull, (make sure you tag them both in the same post!!!!). Nonetheless, they might be best placed to answer whether you’re in an NBN blackspot.
“Can I claim any expenses for my home office like power costs and equipment?”
You’re far from the first person that has asked this question. Because I’m shackled by the barbaric TPB tax financial adviser restrictions, it's lucky for both of us that there is a bunch of succinct literature on the topic for me to share here. Most of the below applies to 2021/2022 (or this financial year).
Again, I’m not a tax account, so best to check this with someone who is, or, I think you’ll find the ATO staff actually very helpful so give them a call on 13 28 65 (they’re actually really nice):
To claim a deduction for working from home, all the following must apply:
- you must have spent the money
- the expense must be directly related to earning your income
- you must have a record to prove it.
Expenses you can claim
If you work from home, you can claim a deduction for the additional expenses you incur. These include:
- electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work
- cleaning costs for a dedicated work area
- phone and internet expenses
- computer consumables (for example, printer paper and ink) and stationery
- home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the
- full cost of items up to $300
- decline in value (depreciation) for items over $300.
Expenses you can’t claim
If you are working from home, you can't claim:
- the cost of coffee, tea, milk and other general household items your employer may have provided for you at work
- costs related to children and their education, including setting them up for online learning, teaching them at home or buying equipment such as iPads and desks
- items that you're reimbursed for, paid directly by your employer or the decline in value of items provided by your employer – for example, a laptop or a phone
- time spent not working, such as time spent homeschooling your children or your lunch break.
Employees generally can't claim occupancy expenses such as rent, mortgage interest, water and rates.
Calculating your expenses
For the 2019–20 income year, there are three ways of calculating home office expenses depending on your circumstances. The methods are the:
Shortcut method (80 cents per work hour) – available 1 March to 30 June 2020 (this method can also be used during the period from 1 July 2020 to 30 June 2021 but that period will need to be claimed in your 2020–21 tax return)
Fixed-rate method (52 cents per work hour)
Another good link is from Victoria University, it’s even simpler if you ask me.
I hope this helps and I’ll keep an eye out on Twitter to read Mr Rudd & Mr Turnbull’s excuses.
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