COVID-19 - Working From Home

Tax Deductions Update

Shortcut Method

With large numbers of people now working from home due to the Coronavirus Pandemic, the ATO is introducing the following shortcut method for related tax deductions:

• Claim of 80 cents per hour for combined running expenses
• Claim can apply to multiple people living in the same house
• Claim no longer requires a dedicated work from home space / area
• Claim requires a diary of hours worked only to substantiate

This change will apply from 1 March to 30 June 2020, after which time the ATO will review the arrangement for financial year 2021. For the part of financial year 2020 prior to 1 March, the usual claim calculations need to be applied and the shortcut method can’t be used for this period.

This update is designed to simplify working from home claims calculations for taxpayers who may never have worked from home before or have moved to full time home office during the Covid-19 period.

Specific Expenses (usual) Method

As taxpayers have different circumstances, the shortcut claim is not compulsory and you can still choose to claim working from home by specific running expenses, depending on which method is more favourable to you. As follows:

• Claim of 52 cents per hour for heating / cooling / lighting / cleaning / depreciation of office furniture
• Claim “work related percentage” of other items as calculated on a reasonable basis – these items include internet / telephone / IT consumables / stationery / depreciation of office (computer) equipment
• Claim requires a diary of hours worked, dedicated work space percentage, and invoices / receipts to substantiate

If you have any questions at all regarding financial and business matters surrounding COVID-19, please don’t hesitate to contact me by email or phone.

Please note, in regard to COVID-19 updates we have been addressing business customers only and if you have not received anything to date it is because we are currently unaware of any change in your circumstances and we won’t crowd your inbox with information that is not specifically relevant to you. By all means if you are not in business and are either affected or have questions relating to the Stimulus measures or ATO Updates surrounding COVID-19, please be sure to reach out to us so that we can advise you directly.