07 May Four ineligible work-from-home claims
The ATO on Thursday urged all taxpayers to be aware that, while the temporary shortcut method will remain available to those claiming work-from-home deductions this year, personal and occupancy expenses, among others, cannot be claimed through any method.
If you are working from home, you can’t claim:
- the cost of coffee, tea, milk and other general household items your employer may have provided for you at work
- costs related to children and their education, including setting them up for online learning, teaching them at home or buying equipment such as iPads and desk
- items that you’re reimbursed for, paid directly by your employer or the decline in value of items provided by your employer – for example, a laptop or a phone
- time spent not working, such as time spent home schooling your children or your lunch break.
The Tax Office has said that working from home does not make a taxpayer’s home a place of business for tax purposes. Employees generally can’t claim occupancy expenses such as rent, mortgage interest, water and rates.
It has also warned that claiming occupancy expenses could expose some taxpayers to capital gains tax when they leave their homes.
The temporary shortcut method has been extended to 30 June this year, and allows taxpayers to claim a fixed rate of 80 cents an hour for all running expenses incurred as a result of working from home, as opposed to calculating costs for specific expenses. Keep in mind this method is all inclusive, meaning you can’t then add additional individual expense claims for phone and internet costs.
Importantly taxpayers using the shortcut method will need some proof of the hours worked from home, for example, a timesheet.
The shortcut method is not compulsory. You can still claim based on actual expenses incurred, while this might be more complex for some as you need a record of every expense, it may work out to be a larger claim than using the shortcut method.