Short Term Cut Method for Claiming Home Office Running Costs

Published April 8, 2020 | By Balanix Solutions

The Australian Taxation Office (ATO) has announced a temporary simplified method for individual taxpayers to claim deductions for additional expenses incurred as a consequent of working from home due the Coronavirus.

Based on the announcement, the ATO will allow individuals to claim a deduction for all running expenses incurred during the period 1 March 2020 to 30 June 2020, based on a rate of 80 cents for each hour an individual carries out genuine work duties from home. This is an alternative method to claiming home running expenses under existing arrangements, which generally require an analysis of specific running expenses incurred and more onerous record-keeping.

So, what will it cover?

Electricity expenses associated with heating, cooling and lighting the area at home which is being used for work.
Cleaning costs for a dedicated work area.
Phone and internet expenses.
Computer consumables (e.g., printer paper and ink) and stationery.
Depreciation of home office furniture and furnishings (e.g., an office desk and a chair).
Depreciation of home office equipment (e.g., a computer and a printer).

Therefore, if you claim the 80 cents for each hour you cannot claim any separate claims for these costs.

Under this announcement, there is no requirement to have separate or dedicated area set aside for working. Also, multiple people could claim where a number of people share the same house.

So, each individual will only need to keep a diary of the number of hours they have worked from home as a result of the Coronvisa during the period 1 March to 30 June 2020.

This new announced method may not give the best result for everyone therefore please contact Balanix Solutions on 07 3264 4783 for the appropriate professional advice for your individual circumstances.

Please Note: The comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.