On Thursday 3 November 2022, the ATO announced draft changes to the work from home expense claim methods.

Find out what this could mean for your 2022-23 individual tax return 

What are the key changes proposed?

Australian taxpayers looking to claim work from home expenses will be impacted by the new fixed rate method that will replace the previous shortcut method used to calculate tax deductions.

 

What does that look like in a snapshot?
    • A new $0.67 cent fixed rate method has been introduced with significant changes to what you can and can’t claim as well as extra record keeping requirements
    • The existing $0.52 cent fixed rate method has been revised and will not be available for use in the 2022-23 financial year
    • The shortcut method of $0.80 cent per hour has now ended (i.e., it can’t be used to calculate a deduction for 2022-23) and the existing fixed rate deduction method has been revised
    • New method of claiming expenses and deductions

The revised fixed rate method provides a $0.67 cent deduction for each hour worked from home. Further details on expenses and deductions are included below.

 

This rate per hour covers expenses included in the revised fixed rate:
    • Data and internet
    • Mobile and home phone usage
    • Electricity and gas
    • Computer consumables (printer ink)
    • Stationery

Note – what is very important to note, is that you won’t to eligible to claim a separate deduction for any expenses included in the revised fixed rate method.

However, you can claim a separate deduction for:

    • The decline in value of assets used while working from home, such as technology and office furniture, as well as any repairs and maintenance of these items
    • Other working expenses you incur as a result of working from home which are not covered by the rate per hour.
What records do you need to claim work from home expenses?

 

In order to use this new method, those who are interested in it must keep additional records and provide evidence. In order to claim working from home expenses, the following records are required:

    • A record of all the hours you work from home for the entire year (timesheet, roster, diary), and
    • Evidence you paid for the expenses covered by the revised fixed rate method (for example, if you use your phone and electricity when you work from home, keep one bill for each of these expenses).

These are proposed changes which you should be aware of.

How can we help?

If you have any questions or would like further information, please feel free to give our team a call in the office on (03) 9888 3175 or via email – info@financiallysorted.com.au, or arrange a time for a meeting so we can discuss your requirements in more detail.

Note: The draft Practical compliance guideline (PCG) released, outlines a new method called the revised fixed rate method for claiming a deduction for working from home expenses in 2022-23, so we expect some of this information below may be revised.

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