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Tax time is rapidly approaching and the ATO will be focusing on areas where they frequently spot errors – including work-related expenses and working from home deductions. Understanding what you can claim and how to properly document your claims will help you avoid mistakes when lodging your return.
Claiming working from home expenses
To be eligible to claim working from home (WFH) expenses, you need to be genuinely working from home to fulfil your employment duties, not just checking emails or taking occasional calls. You must also incur additional running expenses because of your WFH arrangement. These additional costs can typically include energy expenses for heating, cooling and lighting, home and mobile internet or data, phone expenses, and stationery or office supplies.
When it comes to calculating your deductions, you can choose the "fixed rate method" or the "actual cost method". For both methods, you'll need records that accurately track your WFH hours. You can keep a diary or timesheets covering a representative four-week period showing your usual work pattern, or you can maintain a record of your entire year's WFH hours. You'll also need documentation showing you've incurred additional expenses, such as receipts and bills, and be able to demonstrate the proportion that relates to work.
Fixed rate method: This approach simplifies your calculations by applying a set rate for each hour you work from home. For the 2024–2025 income year, this rate is 70 cents per hour. To calculate your deduction, simply multiply your total WFH hours by 70 cents. Remember, if you choose this method, you can't claim additional separate deductions for expenses already covered under the fixed rate method, such as stationery supplies.
Actual cost method: This approach requires you to keep detailed records of all additional costs incurred while working from home. You'll need to track your WFH hours and maintain comprehensive records for all your WFH expenses.
It's important to understand what you can't claim when working from home. This includes items your employer might provide at the office, such as tea or coffee or other general household items. You also can't make a claim for employer-provided laptops or mobile phones, or expenses which your employer has reimbursed
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