Keep track of working-from-home expenses

Source: H&R Block

AS working from home becomes the new norm for many Australians during the coronavirus crisis, experts warn it’s important to understand the tax implications of these changes.

About one in four Australians is bunkered down at home as a result of the outbreak, a new survey by finance app Humaniti has found.

But for some Australians, transitioning to a home office simply isn’t possible – 35 per cent say they cannot carry out their job from home.

H & R Block’s director of tax communications, Mark Chapman, says for those who can, it’s important to understand the tax implications.

“Employees should know that if they incur extra expenses through working from home, which aren’t reimbursed by their employer, they should be able to claim a tax deduction for those costs,” he said.

The survey found 42 per cent of respondents said they were aware of what they could claim on tax when working from home, 41 per cent were unsure and 17 per cent did not realise this was an option.

Mr Chapman said there were two ways to claim. “The easiest option is to claim the ATO’s (Australian Taxation Office) flat rate allowance for home working of 52 cents per hour,” he said.

“All you need to do to claim this is to keep a diary of your home working: note the time you start work each day, the time you finish work each day and any breaks.

“In addition, you can also make separate claims for the work-related proportion of items like your home internet, mobile phone costs and other expenses that directly relate to your work, like stationery, printer ink and even additional toilet rolls.”

Alternatively, the other way is to keep a record of all the expenses you have.

Tahnee Almelor, 29, is a manager of client partnerships for a media and advertising company and has transformed her home kitchen into her workspace. She said given the changes happened so suddenly, she had not thought about tax deductions relating to working from home.

“I’ll probably raise that with my accountant but I am not aware as to whether I need to be prepping for tax time,” Ms Almelor said.

Humaniti CEO Ben Dixon said those working from home should keep a record of their expenses.

“With our Humaniti app, you can easily set up a category such as ‘Home office expenses’, so each time you go to Officeworks or IGA to buy a stapler, not to buy groceries, or you pay your internet bill, you can load that all into this category then download it and hand to your accountant,” he said.