There has been a significant push in recent times for businesses to offer the option to work from home due to the global pandemic and various lockdown restrictions due to COVID-19. The transition to working from home has come with a number of benefits for workers, including a more convenient working lifestyle and the removal of a daily commute.
Whether it’s extra electricity being used at home or the need to set up a home office with furniture, extra electronics and accessories, working from home can be pricey. Thankfully, a good portion of these additional costs are tax deductible, so you can offset these extra costs through a tax deduction on your tax return. In this article, we’re going to discuss what expenses you can claim whilst working from home.
Who Is Eligible For Tax Deductions When Working From Home?
It’s important to understand exactly who is eligible for these tax deductions for working from home, as it isn’t applicable to every individual who works at home. For example, if you’re a small business owner that operates from home, then you aren’t eligible for the working from home tax deductions as these expenses would need to be made as deductions under your business’ ABN.
There are a few other stipulations to consider before filing for expenses, including:
- You must have spent your own money on the expenditure, so your employer can’t have paid for it.
- The expenses you claim for must be directly related to earning income through work-related tasks and duties.
- You will need supporting evidence such as receipts or tax invoices to support your claim.
Take your time and think about what fits these criteria. If you’ve had to buy an ergonomic office chair to set up in your home office, this could be an expense that you can claim. In other words, the expenses you claim need to stem from items that are used solely for work purposes.
What Expenses Can I Claim Whilst Working From Home?
The next consideration is what expenses fit into the above criteria for your job. Every occupation is different, so you’ll need to consider the different types of expenses that you’ve had to pay to work from home. Some things that you can claim for include:
- Utility services used when working from home, such as electricity.
- Any utility services used for work, such as telephone or internet services
- Consumable supplies used for work such as printer ink, paper or pencils
- Home office equipment used for work, such as chairs, monitors or printers.
When it comes to home office equipment, you can choose to either claim the full cost of the expense (up to $300) or the depreciated value of the expense (for items over $300).
What Expenses Can’t I Claim Whilst Working From Home?
There are a number of expenses associated with working from home that you can’t claim for. Some of these items include:
- Rental payments or mortgage interest
- Water bills or council rates
- Food, drinks and refreshments
- Childcare costs including education or childminding fees
- Any expenses that are reimbursed by your employer or that your employer provides for you.
Important Records To Keep For Claiming Work From Home Expenses
In order to accurately claim these expenses, it’s important that you keep a record of the items that you intend to claim. There are a few ways to approach this, such as maintaining a spreadsheet of expenses or using specialist software to maintain a comprehensive record of items. You could even keep physical copies of receipts, however, ensure there is a clear record of the expenses.
Book A Consultation Today
It can be difficult to understand the intricacies of claiming back these expenses, so if you require any assistance you can book a consultation with our tax accountants at The Garis Group by calling on 02 4969 4699.