If you are planning to claim working from home expenses in your 2022-23 tax return, the way you calculate your deduction has changed.
You can no longer use the Shortcut Method to calculate your deduction. For 2022-23, you can calculate your working from home deduction using either the updated Fixed Rate Method or the Actual Cost Method.
Updated – Fixed Rate Method
- This is a fixed rate of 67 cents per hour worked from home.
- You no longer need a dedicated home office.
- Works out the claim for electricity and gas, phone and internet usage, computer consumables and stationery.
- Allows you to separately claim amounts for expenses not covered by the revised fixed rate, such as the decline in value of depreciating assets and the cost to clean a dedicated home office.
- You must keep a record of:
– all hours worked from home during the financial year.
– with evidence you paid for the expenses covered by the revised fixed rate method (for example, if you use your phone and electricity when you work from home, keep one bill for each of these expenses).
– for items or expenses you can claim as a separate deduction, that is, expenses not covered by the rate per hour
– that show how you calculate your work related use of those items, or work related portion of the expenses
- This is a fixed rate of 67 cents per hour worked from home.
Actual Cost Method
- This is the additional expenses you incur as a result of working from home.
- Additional running expenses may include:
– Electricity or gas (energy expenses) for heating or cooling and lighting
– Home and mobile internet or data expenses
– Mobile and home phone expenses
– Stationery and office supplies
– The decline in value of depreciating assets you use for work
– For example, office furniture such as chairs and desks
– Equipment such as computers, laptops and software
- This is the additional expenses you incur as a result of working from home.
- The repairs and maintenance to depreciating assets.
- You must keep a record of:
– for all additional running expenses (for example, stationery, electricity, and gas)
– for all depreciating assets
– that show how you calculate your work-related use of those items.
- The repairs and maintenance to depreciating assets.
It is important to keep the right records so you can choose the method that works best for you.
To learn more about the changes, eligibility, what you can and can’t claim, and the records you need to keep, click on this ATO link.
If you have any questions, please 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). Copyright 2023. Please do not reproduce without the expressed written consent of the author.