Working from Home? Did you know there are new rules for claiming tax deductions?

For the 2022-23 financial year, the shortcut method will be discontinued. Only two methods are available to calculate these deductions: a revised fixed rate and the actual cost method.

What’s new for the revised fixed rate method?

There are 2 important changes to the fixed rate method for claiming home office expenses.

Firstly, the rate has increased from 52 cents to 67 cents per work hour.  Secondly, having a dedicated home office space is no longer a prerequisite for claiming these expenses.

The hourly rate of deduction allows for the following running costs:

       •  Phone and Internet

       •  Electricity and gas

       •  Stationary

       •  Computer consumables

The good news is, if you have any expenses that are not listed above, you can also separately claim those deductions. You can also claim depreciation for assets used for work at home, such as office furniture and technology costing more than $300. Items under $300 can be claimed in full in the same year.

The other good news is that, while a dedicated home office space is no longer required, you can still claim cleaning costs for your office space and repairs and maintenance on the assets you have claimed.

Record Keeping

There are a few changes to record-keeping when claiming working from home expenses as follows:

       •  For the period 1 July 2022 to 28 February 2023, you must have a representative record for the hours worked  from home such as a 4-week diary.

       •  For the period 1 March 2023 to 30 June 2023, you must have a record of the total hours worked from home. This can be shown through a roster, timesheet, or diary.

       •  For other expenses incurred, you must have a record of purchase such as a receipt, bills notice or any other written evidence.

What’s new for the Actual cost method?

The actual cost method rules remain the same. You can claim the additional running expenses based on the work-related portion. Please refer to our article on actual cost method for more information.

How Wilson & Assoc can help?

Our friendly team is here to help you identify the most suitable method to claim your working from home deductions and assist you maximise your refund. If you would like to learn more about our services, feel free to contact us.

Source: Australian Tax Office

Disclcaimer: The information provided within this article is general information only.  None of the comments in these notes are intended to be advice, whether legal, financial product or professional. You should obtain specific advice regarding your particular circumstances from a tax or legal professional.

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