The Australian Taxation Office (ATO) has announced a new method that allows people to claim 80 cents per hour for all their running expenses, rather than needing to calculate costs for specific running expenses.
The change will apply from March 1 to June 30, after which the ATO will review the arrangement for the next financial year as the COVID-19 situation progresses.
Taxpayers still have the choice to use the old method, known as the 52 cents per work hour method, to calculate the work-related portion of specific items such as phone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device.
But under the 52 cents method, taxpayers will need to apportion their use between what is personal and what is work-related, and they must do so on “a reasonable basis”.
The ATO has provided the choice to opt for simplicity and less record keeping, or if you are prepared to keep good records, then you could possibly claim bigger tax deductions.
You can read more about home office deductions at: https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Home-office-expenses/