Working From Home Expenses and Claiming Deductions

While working from home offers many benefits, it also comes with its own set of challenges, especially when it comes to taxes. As an employee working from home, you may be eligible for various tax deductions, but figuring out which deductions apply and how to claim them correctly can be complex and confusing.

That's why Famlonga Business Services is committed to helping you get your working from home tax deductions right. Our team of tax experts understands the nuances of the tax code and can help you navigate the process of claiming the deductions you're entitled to.

What expenses can I claim?

You can claim deductions for expenses that are directly related to your work, such as:

• Home office running expenses, such as electricity and internet expenses

• Work-related phone and internet usage

• Depreciation of office equipment and furniture

• Work-related computer software and hardware expenses

However, you can only claim these expenses if you have incurred them as a result of working from home, and if they are not reimbursed by your employer.

How do I calculate my deductions?

There are two methods you can use to calculate your deductions:

1. The shortcut method: You can claim 80 cents per hour for each hour you worked from home between 1 July 2022 and 30 June 2023. This method is straightforward and doesn't require you to keep detailed records of your expenses.

2. The actual cost method: You can calculate the actual expenses you incurred as a result of working from home. This method requires you to keep detailed records of your expenses, such as receipts, bills, and usage logs.

Which method should I use?

The shortcut method is the easiest and quickest way to calculate your deductions. However, it may not give you the most accurate result, especially if you have incurred significant expenses. If you choose to use the actual cost method, you will need to keep detailed records of your expenses and calculate your deductions accordingly.

What records do I need to keep?

If you choose to use the actual cost method, you will need to keep records of:

• The hours you worked from home

• The expenses you incurred, such as bills and receipts

• The method you used to calculate your expenses

You will also need to keep a record of the depreciation of any office equipment or furniture you purchased.

How do I claim my deductions?

You can claim your deductions when you lodge your tax return. You will need to include your total expenses in your tax return, along with the method you used to calculate your deductions. If you are using the actual cost method, you will also need to provide detailed records of your expenses.