ATO has working from home deductions in its sights

13 September 2018

The ATO has released a statement calling for accuracy when calculating work-related tax deductions.

The statement revealed a record $7.9 billion worth of ‘other work-related expenses’ were claimed by 6.7 million individuals last year. This figure averages at $1179 per claim.

The maximum amount an individual can claim without the need to provide evidence is $50. If you intend on claiming above this amount, you will need to ensure your calculations accurately represent your usage.

Working from home expenses including internet, phone, stationary and asset depreciation (e.g. a laptop) can all be claimed as deductions, as long as the claimant correctly apportions the percentage of work vs. private use, and can provide evidence to back up the claim.

The ATO’s Assistant Commissioner Kath Anderson has highlighted the increasing trend to over-claim on private costs.

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

“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.”

The key to correctly calculating appropriate deductions comes down to carefully examining not only your usage of technology, but also the work space you have at home.

If you have a dedicated home office space, you may be eligible to claim a percentage of running costs, which may include lighting, heating/cooling, cleaning, repairs and depreciation of office furniture.

On the other hand, if the majority of your work from home is conducted in a non-home office environment (e.g. at the kitchen table or on the couch) then you will generally not be eligible to claim associated running costs.

In either scenario, you generally cannot claim for occupancy expenses, including rent, mortgage interest, insurances or taxes.

For more information on what you can and cannot claim, check out the ATO’s reference sheet here and contact the team at Shakespeare on 9321 2111 to discuss how this may apply to your individual situation.

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