It's now tax time, after a very different looking tax year.
The 2019-20 tax year saw many Australians working from home, perhaps for the first time ever, for weeks and months on end.
According to the ATO, almost everyone has had circumstances change in the last few months.
The 80 cents per hour shortcut method.
The COVID-19 pandemic has lead to some big changes for how we do our tax returns, including a new shortcut method offering an easy way to claim working-from-home expenses.
Instead of having to calculate costs for specific running expenses, such as the proportion of Internet time used for work or entertainment, employees can claim a flat 80 cents per hour worked at home with the new shortcut.
The special new arrangement will allow people to claim a rate of 80 cents per hour for all their running expenses, instead of calculating costs for specific running expenses as taxpayers would under normal circumstances.
The new arrangement is only in place between March 1 and June 30, but the tax office will keep an eye on the coronavirus situation and decide if it should continue into the next financial year.
If you're eligible, the ATO has relaxed its required records. All you need to claim is a record of the hours you worked at home from March 1. Timesheets or diary notes are sufficient.
If you've been working from home in this time frame, here are 7 things covered under the 80 cents per hour method.
- This covers lighting, cooling or heating and running electronic items like your work laptop.
- Cleaning costs
- This covers cleaning costs for your dedicated work area
- Phone and Internet expenses
- Including the decline in value of your phone.
- Printer paper, toner and ink
- Home office equipment
- This covers chairs, desks, etc. up to the value of $300.
- Declines in value of certain items
- This includes office furniture and furnishings, computers, laptops and similar items over $300.
Expenses you can't claim.
Coffee is pretty essential in a workplace, even if that workplace is your living room. But no, sorry, you can't claim your caffeine costs, tea, milk, toilet paper or other general household items you would otherwise been provided with at work.
You also can't claim costs related to children and their education, your rent or mortgage, water bills or rates.
You cannot claim any expenses your employer reimbursed you for.
Are there other ways to claim?
Yes, there are two other ways to claim work from home expenses, which may see you being able to claim more money than under the 80 cents per hour shortcut if you've incurred particularly high costs while working from home. However, both alternatives require much more intensive records.
The 52 cents per hour fixed rate method.
The fixed rate method is middle ground, between the easy shortcut method and the far more complicated actual running expenses method.
To use this method, you need a dedicated work area at home, like a home office.
The ATO say if you chose to lodge with the fixed rate method, you can claim a deduction of 52 cents for each hour you work from home for the work-related expenses you incur for additional running expenses. The fixed rate covers all expenses you incur for: