HOME OFFICE DEDUCTION TAXES, Here we have all you need to know.
This financial year has been challenging for Australia’s people. On the first hand, our beloved country faced a daunting summer full of overwhelming bushfires that put many of us at knifepoint, then we got the floods, and finally the novel Covid-19, all of them testing our strength to the limit. The last one has damaged our commercial activities, and increase our expenses reason why the ATO has established a list of cots that you can claim a deduction for.
SO, WHAT CAN YOU CLAIM DEDUCTION FOR?
if you have been working from home, then you will be able to claim all the additional costs that you have been incurring on, this includes:
Electricity fees link to running devices used to work or heating, cooling, and lighting your work area.
Cleaning costs related to your specific workspace.
Phone and Internet expenses.
Computer consumables such as printer ink or paper.
home office equipment like computers, printers, phones, and furniture up to $300.
WHAT KIND OF EXPENSES YOU CAN’T CLAIM?
Items that you have been refunded or paid for directly by your employer.
Expenses linked to the time that you haven’t been working.
cost of coffee, tea, and others related to your household.
Three methods have been created for this purpose, the Short cut (80 cents), the Fixed method (52 cents), and finally the actual cost method.
CAN I USE THE SHORT CUT METHOD?
Answer these questions to know if you can use the short cut method to calculate your expenses.
Are working from home to perform your employment duties?
Have you got additional costs due to your homework activities?
The additional that you had incurred on are among the list of deductible expenses?
if your answer to these questions is yes, then you can use this method.
This system enables you to claim 86cents per each hour that you worked from home from 1 March to 30 June 2020.
The formula to calculate the amount you can claim is simple: Total numbers worked from home * 86cents
Once you know the specific amount it should be included in your tax return as other work-related expenses with COVID-hourly rate as description.
CAN I USE THE SHORT-FIXED METHOD?
This scheme allows you to claim 56cents per each hour you have worked from home. To verify if you are eligible to use it, answer these questions:
Do you have a dedicated workspace?
Do you keep records of your time working from home?
This method covers the following expenses:
The electricity and gas for heating, cooling, and lighting for your work office.
Repairmen office equipment costs.
This system doesn’t cover the following expenses:
Phone expenses, internet expenses, computer consumables.
To claim the reimbursement on these costs, you will need to calculate them separately and you must have the following records:
Phone accounts distinguishing your work-related calls and private calls to calculate your percentage of work-related use for a significant period.
A notebook that shows a typical four-week period of your usual pattern of working at home.
Any small expenses ($10 or less) that you are not able to get a receipt for totaling no more than $200.
Internet use (work-related).
The percentage of the year you used depreciating assets exclusively for work.
The Actual Costs Method
The actual method enables to claim restitution of the additional cost of running your work-related activities from home, and it covers the following values:
Electricity and gas used for lighting, heating, and cooling.
The depreciation of home office furniture (desk, chair) and devices (phones, computers, and similar devices).
Cleaning (only if you use a dedicated area for working)
Computer consumables such as paper and ink.
To calculate the specific amount that you can claim you must have records related to your home-work activities where percentages of time and resources used are easy to identify.
Repairmen office equipment costs. if you don’t have a designated work-area the cost of running your home office shouldn’t be significant and that the expenses related to other household members must be excluded.
Most information about how to calculate your Home officedeductions .
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