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COVID-19: What deductions can you claim back at tax?

Have you been working from home due to Covid-19? Many Australian’s suddenly found themselves working from their home, the lucky ones transitioned into a home office, for some, it’s been the kitchen table.

This tax time, The Australian Tax Office (ATO) has recognised this change in Australian’s working environment and you may be able to claim home expenses depending on your circumstances.

What can you claim?

Depending on your circumstances; you may be able to claim a deduction for the additional expenses incurred including;

  • Electricity expenses associated with the area you work in and running items you use for work
  • Cleaning costs for workspace
  • Phone and internet
  • computer consumables
  • home office equipment
    • full cost of items up to $300
    • decline in value for items over $300.

Requirments to claim:

All of the following must apply:

  • Money already spent
  • Directly related to earning your income
  • Records to prove a claim

When supplies are provided by your employer or you have been reimbursed:

You cannot claim this as an expense on your tax return.

When your not reimbursed by your employer, but receive an allowance:

  • must include this allowance as income in your tax return
  • can claim a deduction for the expenses you incur.

Calculating expenses:

ATO has three ways of calculating expenses, they include:

As the shortcut method, doesn’t require you to have a dedicated work area, such as a private study. This method may be better for you.

Method:

  • Total number of hours worked from home between 1 March and 30 June 2020 × 80 cents.

You can compare methods, with examples here.

Sources:

Australian Tax Office, 2020 https://www.ato.gov.au/General/COVID-19/Support-for-individuals-and-employees/Employees-working-from-home/?gclid=CjwKCAjwi_b3BRAGEiwAemPNUweQi-kpaZ6rwi0hgHWZo29tGIudhdjIQ5sjb1-VqJSV7rXPWqFa7BoCJkQQAvD_BwE&gclsrc=aw.ds

The information provided in this article is general in nature and does not constitute as tax advice. You should consult your tax agent regarding tax matters. For more information please visit ato.gov.au.


by Carly Nichols
July 6, 2020

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