January 31, 2023

Changes to Claiming Work from Home Deductions

Claiming work from home deductions in your tax return is about to get a whole lot harder. Over the last few years there has certainly been a big increase in the amount of time that taxpayers are spending working from home.

The existing $0.52 cent fixed rate method has been revised and will not be available for use in 2022/23. The shortcut method of $0.80 cent per hour has ended (ie it can’t be used to calculate a deduction for 2022/23).

A new $0.67 cent fixed rate method has been introduced with significant changes to what you can and can’t claim as well as extra record keeping requirements. This rate per hour covers expenses such as data and internet, mobile and home phone usage, electricity and gas, computer consumables and stationery.

To claim the work-related portion of your working from home expenses, you must keep from 1 January 2023:

  • a record of the number of actual hours you work from home during the income year or a diary for a representative 4 week period to show your usual pattern of working at home
  • receipts or other written evidence that shows the amount spent on expenses and depreciating assets you buy
  • phone accounts identifying your work-related phone calls and private phone calls to work out your percentage of work-related use for a 4 week representative period
  • a diary that shows
    • your work-related internet use
    • the percentage of the year you use your depreciating assets exclusively for work.

If you record the hours you work from home during a 4 week representative period you can use it across the rest of the income year to work out the total number of hours you work from home. However, if your work pattern changes you need to create a new record.

If you don’t have a representative 4 week period of your hours worked from home or your work-related use of your phone, internet and depreciating assets because they vary throughout the income year, you will need to keep records for the entire income year.

Please contact our office on 9387 5637 if you require any more information in relation to these new rules.

Source: Australian Taxation Office

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