It is no surprise that there is increased interest in what, how and how much of additional office expenses can be claimed in tax returns for last year. Many were forced to work from home, some for lengthy periods. The good news is that there is flexibility and choice as to how you can claim these expenses.
Importantly, expenses can only be claimed if you worked from home to genuinely fulfil employment duties (the ATO have determined that this excludes minimal tasks such as occasionally checking emails or taking phone calls). Additionally, the expenses claimed must be additional expenses as a result of working from home.
Firstly, there are a number of items that cannot be claimed:
– Coffee, tea, milk, general household items even if they are provided by your employer at your usual place of work;
– Equipment purchased for children’s education;
– Items provided and paid for by your employer, or reimbursed by your employer.
With this in mind, the ability to claim some expenses could be of significant value.
Electricity and gas, cleaning and depreciation of office furniture and furnishings are all legitimate expenses. Running costs such as phone and internet can also be claimed under some methods.
There are three methods to claim expenses related to running a home office and you are able to use the method that suits your situation the best. The following table summarises the options, with the third method, the Shortcut method, only available for working from home between 1 March 2020 and 30 June 2021.
For further information, please contact our office. There are also a number of useful tools and calculators on the ATO website: https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can claim/Home-office-expenses/