While it’s difficult to find any real positives during COVID-19, as a result of the quarantine requirements forcing so many people to work from home the ATO has introduced a new shortcut method for calculating related tax deductions.
The method is very straightforward. All you do is calculate the total number of hours you’ve worked from home during the COVID-19 period and multiply those hours by $0.80. The final amount is your tax-deductible expense claim. If there are two people working from home, you can both claim the $0.80 per hour. Record keeping is fairly basic, all you need to do is keep a record of the hours you have worked from home.
Ian Alabakis, of Alabakis Chartered Accountants, told us the shortcut method is a special arrangement for COVID that was originally due to finish in June, but it can now be applied up until 30 September 2020.
This means, you will be able to use the shortcut method to calculate your working at home expenses for the period from:
- 1 March 2020 to 30 June 2020 in the 2019–20 income year, and
- 1 July 2020 to 30 September 2020 in the 2020–21 income year
Ian says the ATO may extend this period, depending on when work patterns return to normal and added that in most cases, if you are working from home as an employee, there will be no capital gains tax (CGT) implications for your home.
What you can’t claim
If you’re working from home because of the COVID-19 lockdown, you generally can’t claim:
- Expenses such as mortgage interest, rent, insurance and rates
- Coffee and other general household items
- Costs related to children’s education
More details are available from the ATO.