The Australian Taxation Office (ATO) has recently revised the fixed rate method for claiming working from home deductions. Previously, the fixed rate was 52 cents per hour and covered only running expenses for home office use. However, the new rate has been increased to 67 cents per hour and now includes additional expenses such as phone usage, internet, stationery, and computer consumables. It’s important to note that no additional deduction is allowed for expenses included in the fixed rate method.
It is still possible to claim relevant amounts for office equipment and depreciable assets used while working from home, including computers and office furniture. The expenses associated with the repair and maintenance of these assets are also still deductible. Additionally, costs related to cleaning a dedicated home office are still eligible for deduction.
The changes have been announced and will come into effect from 1st July 2022, as a retrospective measure.
The revised method requires you to keep a record of all the hours worked from home for the entire financial year. The ATO won’t accept estimates, or a 4-week representative diary under this method from 1 March 2023. However, they will accept a record which represents the total number of hours worked from home (e.g. a 4-week diary), for the period of 1 July 2022 to 28 February 2023.
Records of hours worked from home can be in any form provided they are kept as they occur. Furthermore, you are required to keep records of your expenses claimed under this method, including electricity, phone, and internet bills. Additionally, the revised fixed rate method does not require taxpayers to have a dedicated home office space to claim working from home expenses.
We invite you to reach out to us at 07 3221 5677 or via email at enquiries@walshs.com.au if you require more information or specialist advice on these changes, particularly with regard to medical or private taxation and accounting matters. You can also schedule a meeting with us by clicking on this booking link.
By: Nitai Findlay Undergraduate Accountant | Walshs
