If you’re someone who has a WFH job, you’ll be fairly happy to know that there are actually a bunch of expenses you can claim tax deductions on, whether it’s your internet, phone, or electricity – you just need to meet a few qualifications:
- Regularly work from home in order to fulfil your work duties
- Incur certain expenses due to working from home that you otherwise wouldn’t in an office
- Keep adequate records of all the hours you’ve worked and expenses incurred
- Minimal tasks like taking occasional phone calls or sending emails aren’t enough to qualify
How to Claim Home Office Expenses
Let’s take a closer look at the two methods you can choose from when calculating your home office expenses:
Revised Fixed Rate Method
The ATO updated this method as recently as March 2023, and it’ll allow you to claim 67 cents for every hour you worked at home, covering things like:
- Gas and electricity
- Internet
- Your home and mobile phones
- Stationery and computer consumables
- Things like office furniture can be claimed in general, but you’ll need to keep a receipt of when you bought them
Keep in mind that you’ll need to make separate claims for certain items like:
- Full purchase price of any equipment you buy under $300, like a desk
- Depreciation on any items over $300 and their repairs – office chairs, for instance
Most importantly, though, you’re going to need to get in the habit of keeping records of your actual hours worked in some kind of timesheet or roster – you’re also not able to do this method if you’re paying board instead of rent or a mortgage.
Actual Cost Method
This alternative method is a little bit more simple as it essentially allows you to claim the exact cost of running your home office and includes expenses such as:
- Your mobile and house phone and internet
- Gas and electricity
- Stationery, cleaning, and the costs of any kind of equipment you use that enables you to do your job.
For this method, all you need to do is ensure you’ve kept an exact record of all your expenses, days, and hours worked, so it’s a little bit easier than the previous method.
What You Can’t Claim
If you have something in your home office that you’re considering claiming a tax deduction on, bear in mind that you will need to have personally paid for this expense and have all the supporting evidence to prove it – which means keeping receipts whenever you can. Unfortunately, you are not able to claim deductions on any items that were either provided or reimbursed by your employer. As a good rule of thumb, you’ll also want to keep records up to five years from your tax return’s lodgement date.