Working from home has its benefits – COVID-19 & Tax

2020 has certainly been a year like no other with a world pandemic confining us to our homes and challenging many societal norms, including how we work.
When offices began to shut down in March this year to stop the spread of COVID-19, many of us questioned our ability to work from home, particularly those who work in a team. Fast track to the end of financial year and workplaces around the world are now challenging the fundamental role of a physical workplace, having experienced the many benefits of remote working. Aside from its raft of lifestyle benefits, working from home also reaps tax benefits!

Expenses you can claim when working from home

If you have been working from home during COVID, you will be eligible to claim a range of expenses that ordinarily would be covered by your employer. Items that you have paid for that assist you in your job can be claimed, however they must be directly related to earning your income and you must have proof of purchase. For example; office furniture, computer or audio equipment and stationery.

Other work from home expenses you can claim include; electricity associated with the area you are working from, cleaning costs, phone and internet expenses. In most cases, there are no capital gains tax implications for claiming home office expenses.

How to calculate your expenses

This year due to circumstance the ATO has introduced a temporary shortcut method for claiming deductions during the period 1March – 30 June 2020. This method allows you to claim a deduction of 80 cents for each hour worked from home from 1 March to 30 June 2020, on the proviso that you are ‘working from home‘.

This method is one of three methods used to calculate deductions with the fixed rate method and actual cost method.

having slightly different provisos and applications. Working out which method suits your situation can be difficult and with depreciation and declining value of asset calculations to consider, the process can become convoluted. Engaging a Tax Accountant to help you maximise your deductions is the best way to ensure you are using the right method to claim the right expenses and achieve the tax return you or your business deserve.

Baran Consulting offer a range of tax services, looking after corporate tax as well as individual or sole traders who want to avoid the time consuming process of lodging a tax return. Our friendly and professional team of tax consultants ensure the tax lodgement process is seamless and stress free, allowing you to focus on business growth and productivity.