Tax Benefits of Working From Home

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UPDATE: The Australian Taxation Office (ATO) have announced special arrangements that will make it easier for employees working from home to make a claim at tax time.

Beginning March 1 2020, employees forced to work from due to coronavirus will be able to claim a fixed-rate deduction of 80 cents per hour so long as you are:

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

The shortcut method of claiming 80 cents per hour will cover expenses such as:

  • electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses
  • the decline in value and repair of capital items, such as home office furniture and furnishings
  • cleaning expenses
  • your phone costs, including the decline in value of the handset
  • your internet costs
  • computer consumables, such as printer ink
  • stationery
  • the decline in value of a computer, laptop or similar device.

Previously, eligible employees could claim 52 cents per hour after proving they had a dedicated working area within their home.

The ATO have relaxed the rules and employees will no longer be required to prove a dedicated working space.

Make sure you keep a diary of the hours you work from home to ensure you are ready when it comes to tax time.

The COVID-19 outbreak has forced a number of businesses to put measures in place to enable business to continue. One of which, for those who can, is allowing employees to work from home.

Strategem is one of these businesses.

As part of flexible work policies, working from home is becoming more and more common among service based industries, however, many of us would never have predicted we would need to implement a full office shut-down.

Working from home has its benefits and is more likely to appeal to some employees more than others. Some people like the distraction free zone and report that they are much more productive at home. For others, the daily routine of getting up and going to work is more effective for them.

In this current situation, many of us have found our employees forced to work from make-shift home offices indefinitely.

There are a number of things to consider when it comes to implementing working from home. For businesses you have the obligation to ensure your employees are working in a safe environment and have access to the essential items they need to complete their job. For individuals, it’s important you feel comfortable in your work space, which may have required a trip to the local office supplies store.

Businesses

As more and more businesses are starting to implement working from home policies, it’s important to be across the relevant obligations that you need to adhere to.

Allowing your employees to work remotely comes with questions and risks. Is there work space clear of obstructions? Are the power cords and powers boards safe? Are there any trip hazards? Do they have adequate ventilation and lighting? Do they have access to a first aid kit? These are just a few of items you will find on a working from home checklist. It’s important to know what you are responsible for in these situations, you may be answerable for more than you think.

To find out more information on this please visit Business Victoria website.

Individuals

If you’ve found yourself cleaning out the spare bedroom to make room for a home office set up, you may be eligible to make additional claims come tax time.

If you’ve had to purchase items such as computer screens, keyboards or mouses, keep your receipts. These are items that can be claimed. In addition, you may also be eligible to claim your internet, phone and electricity.

If you’re working from home during this period, it’s a good idea to keep a home office usage diary. It helps provide an accurate claim when it comes time to doing your tax return and reduces the amount of guess work.

We’ve developed a Home Office Usage Diary that can be used to keep track of your hours worked at home. You can then include this in your claims when you lodge your tax with your Accountant later in the year.

If you have any further queries regarding what you can and cannot claim in respect to working from home, please contact us. Our knowledgeable Accountants are here to provide you with the support you need. If you’ve had to temporarily shift your office to your home and are unsure of what you should invest in, we are here to provide the answers.

Contact us and let us help, click here or call 
Bendigo 03 5445 4777
Melbourne 03 8621 8100

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