Work from home tax deduction

Claiming Work From Home Expenses

Tax Tips
May 13, 2024•2 min read

“Understand the deductions you can claim on your tax and do not leave your hard on cash on the table.”

Introduction:

Since covid hit in 2020, there is a new trend of working from home, therefore I have simplified the tax deductions that can be claimed if you work from home.

From July 2022, There are only 2 methods available to calculate work from home claim.

1. Fixed Rate Method - 67 cents per hour

 includes and they cannot be claimed separately, (Alternatively can use Actual Cost method)

  • home and mobile internet or data expenses

  • mobile and home phone usage expenses

  • electricity and gas for heating, cooling and lighting

  • stationery and computer consumables, such as printer ink and paper.

  • if you have other expenses other than above then we can claim

  • Computers, Desks, Chairs, bookshelves (Depreciate of more than $300)

  • Occupancy expenses (Mortgage interest or rent ,cleaning) if dedicated home office, % of area Only for Running Business from Home)

2. Actual Cost Method

  • Decline in value of depreciating assets (home office furniture, phones, computers, laptops, etc) apportion work-related.

  • electricity and gas

  • Home and mobile phone, data and internet expenses

  • stationery and computer consumables, such as printer ink and paper

  • cleaning of dedicated home office (Must be dedicated room)

  • Occupancy expenses (Mortgage interest or rent if dedicated home office, claim % of area)

    * Cannot claim additional running expenses if other member also use the room (e.g., family lounge room)

What are Occupancy Expenses?

To claim Occupancy Expenses, the client must show that:

  • It was necessary to work from home, the employer did not provide alternative place to work from

  • The area of the home is exclusively used for work, meaning a separate dedicated home office.

  • Occupancy expenses include

  • Rent

  • Mortgage interest

  • Council and water rates

  • land taxes

  • house insurance premiums.

Occupancy expenses can be apportioned on a floor area basis and also apportioned if worked part-year.

** If you use occupancy expenses, there might be CGT implications when you sell home and you won't be eligible for the full main residence exemption.

*** You need to keep all the receipts and bank statements along with floor plan of home with floor area clearly marked.

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