Do your home­work when work­ing from home

Wangaratta Chronicle - North East Regional Extra - - NEWS -

TECH­NOL­OGY-driven changes to the em­ploy­ment mar­ket are see­ing record num­bers of Aus­tralians claim­ing de­duc­tions for ex­penses in­curred while work­ing from home.

But a high level of mis­takes, er­rors and ques­tion­able claims have prompted the Aus­tralian Tax­a­tion Of­fice (ATO) to in­crease at­ten­tion, scru­tiny and ed­u­ca­tion for home of­fice ex­penses this tax time.

As­sis­tant Com­mis­sioner Kath An­der­son said that last year, 6.7 mil­lion tax­pay­ers claimed a record $7.9 bil­lion in de­duc­tions for ‘other work-re­lated ex­penses’ which in­cludes ex­penses re­lated to work­ing from home.

“There is a ris­ing trend of em­ploy­ees work­ing from home, and while ex­tra costs re­lated to work­ing from home are usu­ally de­ductible, we are see­ing some tax­pay­ers ei­ther over-claim­ing or claim­ing pri­vate costs,” she said.

“There is mount­ing ev­i­dence that many tax­pay­ers don’t know what they can and can­not claim.

“In par­tic­u­lar, we are see­ing some tax­pay­ers claim­ing ex­penses they never paid for, ex­penses their em­ployer re­im­bursed, pri­vate ex­penses and ex­penses with no sup­port­ing records,” Ms An­der­son said.

Tax­pay­ers can le­git­i­mately claim ad­di­tional costs in­curred as a di­rect re­sult of work­ing from home, but need to be care­ful not to claim pri­vate ex­penses as well.

“Claims for the work-re­lated por­tion of ex­penses like phone, in­ter­net, de­pre­ci­a­tion of your com­puter, print­ing and sta­tion­ary are all al­lowed,” she said.

“But one of the big­gest is­sues we are see­ing is peo­ple claim­ing the en­tire amount of ex­penses like their in­ter­net or mo­bile phone, not just the ex­tra bit re­lated to work. “In real­ity, the rest of us are sub­si­dis­ing their pri­vate phone calls and in­ter­net us­age, which is not okay.”

Ac­cord­ing to Ms An­der­son, the ad­di­tional costs of run­ning ex­penses like elec­tric­ity for heat­ing, cool­ing and light­ing are de­ductible, but you need to be able to demon­strate that there were ad­di­tional costs.

While em­ploy­ees can claim ad­di­tional run­ning costs as­so­ci­ated with work­ing from home, oc­cu­pancy costs are lim­ited.

“Em­ploy­ees can­not gen­er­ally claim oc­cu­pancy-re­lated ex­penses like rent, mort­gage re­pay­ments, prop­erty in­sur­ance, land taxes and rates,” Ms An­der­son said.

She warned that em­ploy­ers are some­times con­tacted to ver­ify ex­penses.

Ac­cord­ing to Ms An­der­son, record-keep­ing is a key fo­cus area for the ATO this year.

For more in­for­ma­tion: visit­di­vid­u­als/In­come­and-de­duc­tions/De­duc­tion­syou-can-claim/Home-of­fice­ex­penses/

To find the home of­fice cal­cu­la­tor, visit­cu­la­tors-and-tools/home-of­fice­ex­penses-cal­cu­la­tor/

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