Work From Home Tax Deductions

By Forrest Private Wealth

Our Financial Planners have been inundated with questions relating to work from home tax deductions. As it’s a popular topic, we thought we’d address it as a breakout blog piece. A lot of us have worked from home (and may still be working from home) as a result of the Coronavirus. Below is the ATO released guidance on working from home tax claims for expenses incurred directly relating to earning income which are not reimbursed by your employer. You must keep proof of your working from home hours and these expenses.

Calculating your work from home deductions

There are three ways you can choose to calculate additional running expenses:

Shortcut Method
  • A deduction of $0.80 for each hour worked from home due to the Coronavirus is allowed if the person incurs additional deductible running expenses as a result of working from home.
Fixed Rate Method
  • A rate of $0.52 per hour for the cost of utilities, cleaning and depreciation of office furniture
  • work-related phone and internet expenses, computer consumables, stationary
  • work-related depreciation of a computer, laptop or similar device.
Actual Cost Method
  • claim the actual work-related portion of all running expenses, calculated on a reasonable basis.

The shortcut method makes it easier to calculate work from home tax deductions. This is especially handy for the many people who are working from home for the first time due to COVID-19 to accurately complete their tax return. These arrangements have been put in place for expenses incurred from 1 July 2021 to 30 June 2021.

For more details on working from home tax claims, please refer to the ATO website or feel free to reach out to the one of the Financial Planners at Forrest Private Wealth.


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