ATO Announces Short Cut for Claiming Home Office Running Costs
The ATO has announced a temporary short cut to make it easier for individual tax payers to claim deductions for additional running expenses incurred as a result of working from home due to Coronavirus.
What is the short cut home office running costs method?
If you are working from home as a result of Covid-19 you can claim a deduction for all home running expenses incurred from 1 March 2020 to 30 June 2020 based on the rate of 80c per hour.
What does home office running costs include?
Home running costs include:
electricity associated with heating, cooling and lighting areas being used for work
cleaning costs for dedicated work areas
phone and internet expenses
computer consumables (printer paper, ink etc) and stationery
depreciation of home office furniture and furnishings (office desk, chair etc)
depreciation of home office equipment (computer, printer etc)
How much can I claim ?
You can claim 80c/hour for each hour you are required to work from home from 1 March 2020 to 20 June 2020.
If you choose to claim a deduction based on the 80c per hour method, you cannot claim separate deductions for any of the above running expenses (ie depreciation of equipment, stationery, etc).
Do I need a dedicated work space to be able to claim?
No. There is no requirement to have a separate or dedicated area set aside for working if you are claiming under this method.
What if more than one person is working from my home?
Each individual tax payer that is genuinely working from the home due to Covid-19 during the period 1 March 2020 to 30 June 2020 is eligible to claim a deduction of 80c/hour worked for home running costs.
What records do I need to have?
Each individual tax payers are required to keep a record of the number of hours worked from home as a result of Covid-19 for the period 1 March 2020 to 30 June 2020. The records can include timesheets, diary entries or rosters.
What about home running costs before 1 March 2020?
If you work from home before 1 March 2020, you can still claim a deduction for home running costs under the existing claim arrangements.
Contact our office for details on how you can claim this deduction in your 2020 Income Tax Return.