The ATO has issued new guidance for individuals who wish to claim Working From Home (WFH) tax deductions. The two following methods will be effective from 1 July 2022 as the temporary COVID WFH rate ceased on 30 June 2022. The ATO has reminded taxpayers that WFH deductions can only be claimed when actually fulfilling your employment duties from home, not merely checking emails or an occasional phone call.
Method 1 – Fixed Rate Method
A fixed rate of 67 cents per hour which covers energy expenses, phone usage, internet, stationery and computer consumables. A separate deduction can be claimed for decline in value of assets used for WFH such as computers and office furniture. The cost of maintaining and repair these assets may also be claimed. Taxpayers are required to keep a diary of all actual hours WFH for the entire year or a 4 week representative diary from 1 March 2023.
Method 2 – Actual Cost
This method requires taxpayers to claim the actual work- related costs of running a home office. All bills and receipts for each expense must be retained. A four week diary of a usual pattern of work hours can be used to determine apportionment of expenses between work related and private use. For any asset used for WFH such as a computer or furniture, only the work related percentage can be claimed. For all assets purchased for over $300, the cost must be claimed over the prescribed useful life as a decline in value deduction.
If you require any assistance in relation to claiming your WFH deductions, please get in contact by calling our office on 03 9693 5000 or sending us an email at email@example.com.