The Australian Taxation Office (ATO) has “refreshed” the way in which taxpayers who work from home can claim deductionsand it includes some severe record-keeping for a potentially smaller return.
It says the revised methodology will come into effect for 2022-23 income tax returnshowever applies retrospectively to any claims from July 2022 onwards.
There are two claiming strategies for taxpayers working from residence, the “precise price” methodology and the “fastened charge” methodology — solely the fastened charge methodology is altering.
The fastened charge methodology permits taxpayers to say a share of every greenback they’ve earned whereas working at residence.
It additionally previously allowed taxpayers to say extra bills like stationery and cell phone or vitality bills. That is now not the case.
Below the revised methodology, the share taxpayers can declare will enhance from 52 cents to 67 cents, however that can embody all of these different bills which may have beforehand been claimed as extra bills.
That is totally different once more from the momentary “shortcut methodology” which was out there to taxpayers final monetary 12 months, permitting them to say 80 cents to the greenback.
H&R Block tax communications director Mark Chapman informed 7NEWS.com.au in a press release that this new 67 cent methodology would possibly imply the typical taxpayer may lose about $629 of their future tax returns.
“(The) typical particular person stands to lose out on deductions utilizing this new methodology,” Chapman stated.
The everyday Australian taxpayer working from residence “would have been capable of declare $1379 below the previous regime,” however below the brand new methodology they stand to say deductions round $750, Chapman stated.
He stated that is “primarily as a result of cellphones are included within the new fastened charge however excluded – and thus claimable individually – utilizing the previous 52 cents charge.”
ATO assistant commissioner Tim Loh stated on Thursday that the modifications “higher replicate up to date working from residence preparations”.
The ATO doesn’t require taxpayers to have a devoted residence workplace to say working from residence bills, ATO studies.
How one can declare below the brand new fastened charge methodology
There are a few different issues to concentrate on below the revised fastened charge methodology – report conserving and “double dipping”.
Document conserving
One of many main modifications is the quantity of report conserving that’s required of taxpayers wishing to say below the revised methodology.
“Taxpayers have to hold a report of all of the hours labored from residence for the whole revenue 12 months – the ATO will not settle for estimates, or a 4-week consultant diary or related doc,” the ATO stated
Timesheets, rosters, a diary for the total 12 months, or time logs that show the hours spent accessing employer or enterprise programs are all acceptable types of report conserving.
“Data of hours labored from residence will be in any kind supplied they’re saved as they happen,” the ATO stated.
One invoice for every expense included below the brand new charge, reminiscent of phone payments or electrical energy payments, should even be saved.
Double dipping
If taxpayers are utilizing the fastened charge methodology they have to not moreover deduct any of the under bills already coated by the speed.
“If (taxpayers) use their private cell phone for work functions and select to say the 67 cents per hour fastened charge, they can not then declare a separate deduction for his or her cell phone,” Chapman stated.
“This was not the case below the previous 52 cents charge, the place cellphones had been excluded. Taxpayers could not perceive this – and will attempt to declare each – leaving them open to audit.”
What’s coated by the brand new 67 cent charge
- Vitality bills (electrical energy and fuel
- Telephone utilization (cell and residential)
- Web
- Stationary
- Pc consumables
What will be claimed individually
The next deductions will be claimed as well as as they don’t seem to be included within the new 67 cent charge.
- The decline in worth of property used whereas working from residence, reminiscent of computer systems and workplace furnishings.
- The repairs and upkeep of those property.
- The prices related to cleansing a devoted residence workplace
“And bear in mind, you’ll be able to’t declare for issues like espresso, tea, milk and different normal home goods, even when your employer could present these sorts of issues for you at work,” Loh stated.
The precise price methodology
The precise price methodology has not modified, and stays a way that includes much more stringent report conserving.
All receipts, payments and different paperwork which show the claimed bills incurred whereas working from residence, have to be saved.
A report must also be saved that exhibits the hours labored from residence, both the precise hours or a diary/doc which exhibits a consultant four-week interval of the taxpayers common working from residence sample.
Taxpayers can even have to hold a report of how they’ve calculated and separated their work-related bills from their private bills, which can even be used to find out the depreciation of property.
