The ATO has flagged the temporary shortcut method as a key way to take advantage this tax time.
The working-from-home shortcut method allows claims at the all-inclusive rate of 80 cents per hour, rather than needing to do complex calculations for specific items. It can be claimed by multiple people living under the same roof and, unlike existing methods, does not require a dedicated work area.
“Even with people shifting back to the office, we know many Australians have opted to continue working from home at least one day a week,” assistant commissioner Tim Loh said.
“The shortcut method is straightforward; just multiply the hours worked at home by 80 cents.
“The only proof you need is a record of the number of hours you’ve worked from home, such as a timesheet.”
That being said, Mr Loh noted taxpayers can still claim under the existing arrangements if they choose.
“If you decide to go with an existing method, I would encourage you to do your research and keep good records,” he said.
“Keeping track of each individual expense and calculating the work-related use of each one can be fiddly, so be organised. So, make sure you’ve read the guidance on our website or chat to your registered tax agent.”
On the flip side, Mr Loh also used the opportunity to outline his top four “no-go” expenses, flagging that if a taxpayer chooses to claim their working from expenses through the fixed rate or actual cost methods, they can’t claim:
1. Personal expenses like coffee, tea and toilet paper. While they might normally be supplied by your employer, they still aren’t directly related to earning your income.
2. Expenses related to your child’s education, such as online learning courses or laptops.
3. Large expenses up front. Any asset that costs over $300 (either in total or per item), such as a computer, can’t be claimed immediately. Instead, these claims should be spread out over a number of years.
4. Employees generally can’t claim occupancy expenses such as rent, mortgage interest, property insurance, land taxes and rates. Working from home does not mean your home is a place of business for tax purposes. If you claim occupancy expenses, you may have to pay capital gains tax when you sell your home, even if it is your main residence.