The ATO's Giving You A Shortcut To Calculate Working From Home Expenses

With many Australians now working from home amid the coronavirus crisis, electricity and internet bills will likely increase. Australia's tax system allows us to claim some of that back but it can be a bit of an arduous process. The Australian Tax Office (ATO) has now announced it's offering workers a shortcut to simplify the process. Here's what you need to know.

The ATO revealed on 7 April it's making life easier for those working from home due to new coronavirus restrictions.

This new 'shortcut' method will allow workers to claim a deduction of 80 cents for each hour worked between 1 March 2020 until at least 30 June 2020. To be eligible, you'll need to prove you're completing your regular job from home as opposed to the office due to coronavirus — not just minimal tasks such as taking calls and answering emails.

The ATO has pointed out the expenses included in the claim so you can't double dip and claim them again if you use this method:

  • electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work
  • cleaning costs for a dedicated work area
  • phone and internet expenses
  • computer consumables (for example, printer paper and ink) and stationery
  • home office equipment, including computers, printers, phones, furniture and furnishings

When it comes to the home office equipment, the ATO will let you claim either:

  • the full cost of items up to $300
  • the decline in value for items over $300.

How to use the ATO's new coronavirus shortcut method

As intended, the ATO's shortcut method is the perfect way to track expenses for those out there too busy or lazy to jot everything down. You'll still need to have evidence of the hours you worked and that could include timesheets or diary notes.

"You must keep a record of the number of hours you have worked from home as a result of COVID-19. Examples are timesheets, diary notes or rosters," the ATO announcement said.

"If you use the shortcut method to claim a deduction and you lodge your 2019-20 tax return through myGov or a tax agent, you must include the note ‘COVID-hourly rate’ in your tax return."

If you're working a set amount of hours every week and it doesn't change, then the method really is as simple as doing some multiplication. Say you're part-time and you work 20 hours a week, excluding lunch breaks. There are 17 weeks between 1 March and 30 June so you'll just need to multiply 20 x 17 x 0.8 to get your total. For workers who have changing hours week-by-week, it's a good idea to save all your rosters and note down the amount of hours you're working each week to make tax time less of a headache.

If you think you'll get a better return by combing through your expenses with a fine tooth, then the regular method is still available — you'll just need to put in a bit more work or you could defer it to your tax agent.

This article was originally published on 8 April, 2020.

Reminder: Track Your Home Work Expenses For Tax Time

Now that a lot of us are working from home to curb the spread of coronavirus, the bills our workplaces would usually cover are now being deferred to us. That means internet, phone charges, electricity and anything else. This is a reminder to write it all down because you should be able to get a lot of it back during tax time.

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