Claiming Home Office Deductions

Author: Wendy Waack, Partner, TAG Financial Services

As people are now returning to the office, now is a great time to make sure your records are correct for claiming the work from home expenses deduction in your 2020-2021 tax return.

How can I claim my expenses?

For the 2020-2021 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) – this has been extended and can be used for the period from 1 July 2020 to 30 June 2021. The ‘shortcut method’ is a short-term deduction created for COVID related work from home. At this stage, this will revert back to the ‘fixed rate method’ after 30 June 2021.
  • Fixed rate method (52 cents per work hour)
  • Actual cost method

Shortcut method

You can claim a deduction of 80 cents for each hour you worked from home for the period between 1 July 2020 – 30 June 2021.

You can calculate your working from home deduction using the shortcut method, with this formula:

  • the total number of hours worked from home from 1 July 2020 to 30 June 2021 × 80 cents (for the 2020–21 income year).

if you:

  • were working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls; and
  • incurred additional running expenses as a result of working from home.

The shortcut method does not require you to have a dedicated work area, such as a private study.

Records you must retain

You must keep a record of the hours you have worked from home. This could be a:

  • timesheet
  • roster
  • diary
  • a similar document that shows the hours you worked.

If you use the other methods, you must also keep a record of the number of hours you worked from home along with records of your expenses.

If I use my home as a home office does it affect the Capital Gain on the property?

If you are using the short cut method for working from home as an employee, there will be no capital gains tax (CGT) implications for your home.

If you have questions or need any assistance, please do not hesitate to contact us on 9886 0800 or via email.

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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).