ARE YOU WORKING FROM HOME DUE TO COVID-19?
Many Australians have been required to work from home due to COVID-19 and as such the ATO has introduced a new method for claiming household running expenses for the 2020FY.
Australians working from home due to coronavirus will be able to claim 80 cents per working hour for all of their running costs. This only applies for hours worked at home between 1 March 2020 and 30 June 2020. If you were working from home prior to 1 March 2020, you are entitled to claim running expenses using the existing methods detailed below.
To be eligible to claim the new 80 cents COVID-19 shortcut running expense method the following needs to apply:
· You were required to work from home due to coronavirus restrictions
· You were not reimbursed by your employer for any expenses incurred whilst working from home
· You have kept records of hours that you spent working from home (payslips, diary logs or time sheets)
* A dedicated home office area is not required to claim the expense
Additional running expense claims that you may be entitled to are as follows:
electricity expenses related to heating, cooling and lighting the dedicated working area
cleaning costs for a dedicated work area
work related portion of phone and internet expenses
computer consumables & stationery expenses
equipment purchases (depreciated if the purchase price is over $300.00)
NON-DEDUCTIBLE COVID-19 HOME OFFICE EXPENSES:
· Consumables that would have been provided at work such as coffee, milk, tea etc.
· Occupancy expenses relating to interest, rates & rent
EXISTING METHODS FOR CLAIMING HOME OFFICE EXPENSES:
METHOD 1 - 52 cents per hour method
A claim of 52 cents per hour spent working from home is allowed encompassing the running expenses that have been listed above. As an example, if you spent an average of 8 hours per week working from home, you would be entitled to claim $216.32.
METHOD 2 - Actual expenses method
An alternative to the 52 cents per hour method is calculating the actual costs that have been incurred considering that you have a dedicated work area. This would entail logging the hours worked from home and determining the percentage that should be allocated for work related purposes and those that are considered personal.
Once a work-related percentage has been established it can be utilised to work out the work-related deduction on the following expenses:
· full cost for items up to $300 or decline in value for items over $300
· heating, cooling and lighting
· the costs of repairs to your home office equipment, furniture and furnishings
· cleaning costs
· computer consumables such as printer paper, ink and stationery
Please be aware that this method requires detailed calculations and therefore it is imperative that you retain all receipts to substantiate your claim.
If you have any questions regarding your eligibility and what you can claim please call us on 03 9682 7011.