There have been changes to the rules for claiming work from home deductions on your 2023 tax return. The COVID shortcut calculation method of a fixed rate of 80 cents per hour worked from home ended on 30 June 2022.
From 1st July 2022 you have the choice of the revised fixed rate method or the actual cost method.
Changes that came into effect on March 1, 2023 include strict record keeping and reporting requirements to ensure you can make a claim regardless as to which deduction choice you make.
Under the actual cost method, you will need to keep a detailed record of all costs incurred and calculations of how much relates to working from home.
You may be able to make an actual cost method claim for expenses you incur such as:
- Data and internet
- Mobile and home phone usage
- Electricity and gas
- Computer consumables
- Stationery
- Decline in value of computers and office furniture as well as maintenance and repairs of these items
- Cleaning (if you have a dedicated home office)
Under the revised fixed rate method, you are able to claim 67 cents per hour you work from home to cover expenses such as:
- Data and internet
- Mobile and home phone usage
- Electricity and gas
- Computer consumables
- Stationery
In addition to the 67 cent per hour calculation you can also claim a separate deduction for:
- Decline in value of computers and office furniture as well as maintenance and repairs of these items
- Cleaning (if you have a dedicated home office)
The record keeping under the revised fixed rate method has also changed, effective from 1st March 2023.
You need to have a record of all the hours you work from home for the entire year eg. a timesheet, roster, diary or similar document.
You also need evidence you paid for the expenses covered under the revised fixed rate method. It is best to keep at least one bill from each item you are looking to claim for eg. phone and electricity bill.
You will also need to keep receipts for items that you claim a separate deduction for eg. computer or office chair.
From 1st July 2022 – 28th February 2023, the ATO will accept an estimate of the hours worked from home to use in the 67 cent per hour calculation, however from 1st March 2023 you must keep a record of all hours worked from home for the entire year, no estimates will be accepted.
A good summary to keep is included in the new ATO factsheet.
Should you have any queries in relation to these changes, please contact your local Accru office.
