If you have just typed into google, “What can I claim when working from home?” Then this is the blog post you are going to want to read. We want to help you increase your tax refund and if you are working from home (not just putting in a few extra overtime hours) then you might be able to claim some additional deductions on your upcoming tax. 

This is perfect for those of your who are currently working from home (whether permanently or in a hybrid situation) or are running a business from home. 

Home Office Running Expenses

Let’s go through the 3 main ways to claim your home office running expenses. This will be the way most use if they are working from home sometimes, rather than all the time. There is the Shortcut Method, the Fixed Rate Method and the Actual Cost Method.

Shortcut Method

There is the current shortcut method that can be used when calculating home tax deductions, and can definitely simplify things! Where you can claim 80c per hour for each hour worked from home (but then it does mean you can’t claim the extra things like internet). So before jumping in head first and using this method, make sure it’s right for you and your situation. This is where we can advise you based on your individual situation. Just a side note, the ATO will be phasing this out shortly too!

Fixed Rate Method

This is a nominal rate (which is currently 52c per hour) set by the ATO and covers all home office expenses, rather than claiming them individually. Similar to the above shortcut method, except you are only claiming 52c per hour.

Actual Cost Method

This is where you need to record a pattern of use, and you would be jotting down the hours in which you have used your home office (the days and times). This diary needs to be kept for at least 4 weeks in a financial year, and then you can divide up your associated expenses. This method does lead to a bigger return, but it’s more complicated.

Occupancy Expenses

The alternative is if you’re running a business from home or work from home on a more permanent basis, and you might prefer to use the occupancy expenses calculations instead. There are a few additional hoops to jump through for this option, such as having signage, however it means that once the percentage of the home which is business related, can then be claimed on expenses such as rent, internet, computer, and so on.

It’s important to note, that if you do go down this deduction route, it can leave you with capital gains tax payable if you ever choose to sell your home. We recommend booking an appointment with our individual tax returns specialist Dave if you'd like to go down this route. 

What Could You Claim?

If this has sparked your interest and now you’re wondering what you could be potentially claiming, we recommend booking in with our Tax Accountant Dave Mackenzie who specialises in Individual Tax Returns. 

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