It can easily be said that COVID-19 has put a real spanner in the works of 2020. Because if it we have been forced to rethink our work patterns and habits. Gone are the long commutes, uncomfortable desk chairs and stale offices. The new normal is the home office. We work from home in dressing gowns and slippers. We ensure we appear respectable from the waist up for the important Zoom meetings. Also, being able to eat anything in the fridge, not just the food labelled with your name is a true luxury.
With all of these changes, the Australian Taxation Office is coming on board to add flexibility to how we claim our home office deductions.
People working from home as a result of COVID-19 can calculate their tax deductions in a quicker, more efficient manner. Rather than calculating the cost of running expenses, a rate of 80 cents per hour for expenses can be used.
Furthermore, multiple people living and working in the same household can each claim this new rate. For example, a couple living together are each able to utilise this method and each claim the 80 cents per hour rate.
What do I need to do?
To claim the 80 cents per hour, all that is required is that you keep a record of the hours worked from home. These records can be in the form of diaries, notes or time sheets. If you choose to utilise this method, these records will be proof of your claim.
Am I allowed to only use this Method?
Using this short-cut method does not restrict you from making work from home claims under other methods. Fixed Rate or Actual Cost methods are still available to use.
Can I use this method to claim for the whole financial year?
Only claims for working from home expenses from 1 March, 2020 until at least 30 June, 2020 can use the Short Cut method. Any working from home expenses prior to this date must be calculated by one of the other methods. This time frame may be extended, depending on when work patterns normalise.
Can you help?
As always, if you are unsure about any of the processes for your small business, contact us or book in a 15 minute appointment to your concerns further.