New Working From Home Deduction Shortcut
April 8, 2020
The ATO has introduced a simplified method to claim working from home deductions from 1 March
The ATO is introducing a new method which will allow people to claim 80 cents per hour for all their running expenses, rather than needing to calculate costs for specific running expenses.
The change will apply from March 1 to June 30, after which the ATO will review the arrangement for the next financial year as the COVID-19 situation progresses.
If you choose to use this shortcut method, all you need to do is keep a record of the hours you worked from home as evidence of your claim. For many people it is a record of their time sheets. For others it may be an Outlook calendar or keep a diary.
Multiple people living in the same house will be able to claim the new rate. And the requirement to have a dedicated work-from-home area has also been removed.
The new arrangement does not prohibit people from making a working-from-home claim under existing arrangements,
where you calculate all or part of your running expenses.
Claims for working-from-home expenses prior to March 1, 2020 cannot be calculated using the shortcut method and must use the pre-existing working from home approach and requirements.
If the Federal Government announces a prolonged lockdown extending into the next financial year the ATO is likely to extend the new claiming method.
People still have the option to use the old claiming method to claim for specific items, but that may prove tricker to calculate.
This is known as the 52 cents per work hour method for claiming items such as heating, cooling, lighting, cleaning and the decline in value of office furniture.
Taxpayers can also use this old method to calculate the work-related portion of phone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device.
But under the 52 cents method taxpayers will need to apportion their use between what is personal and what is work-related, and must do so on "a reasonable basis".
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