Tax Tips

With so much change in our lives this year, it’s good to know that the fundamentals of tax time have not changed. However, with so many of us finding that we are working from home it is worth digging into what you can and can’t claim this year.

The two main changes for this tax time are:

1. Previously, in order to claim work expenses from home you were required to have a dedicated workspace, but that rule has been waived for this year. This means all of us can claim work expenses from home even if we are working from the couch!
   
   
2. The ATO has developed a shortcut to allow the quick calculation of all work expenses incurred at home. You can claim a deduction of 80 cents for each hour you worked from home in the 2019–20 income year during the period 1 March to 30 June 2020. Also, multiple people living in the same house will be allowed to claim the new rate.
   
   

The shortcut method is a welcome addition to quickly calculating your expenses however it may not be the best method for the most effective tax return for you and you should let your accountant work out the best tax plan for you.

It’s also worth noting that you can also claim facemasks and hand sanitisers, if you have paid for it and not been reimbursed.

Three golden rules of deductions

1. You need to have spent the money and not been reimbursed for it,
   
   
2. the item needs to be directly for work-related purposes and you can’t claim any private use of an item and, finally,
   
   
3. you need a record to prove it and that record needs to show that you spent the money and what the item was
   
   

What you can claim

Among the items you can claim here are costs of cleaning your home working area, depreciation of home office furniture and fittings and costs of repairing home office equipment, furniture and furnishings.

What you can’t claim

• Coffee, tea, milk, and other general household items.
  
  
• Costs related to children and their education.
  
  
• Time spent not working.
  
  
• Please note you cannot claim occupancy expenses as deductions. Occupancy expenses are things like interest on housing loans, rent, council rates, building insurance and similar things.
  
  
• Toilet paper!
  
  

Naturally when working from home other deductions may have changed due to the new circumstances we all find ourselves in. Please contact Caroline from TaxGo to book an appointment to legally maximise your tax refund.