Work From Home Deductions: Claiming Your Expenses Like a Pro!

Working from home has become the new normal for many Australians. With tax time underway, learn how to claim deductions for home office expenses using the fixed rate (67 cents per hour) or actual cost method.

Which Method is Right for You?

The 67-cent method is generally simpler and quicker. You multiply the number of hours you worked from home by 67 cents. This covers expenses like electricity and gas for heating, cooling, and lighting, internet, phone, stationery and computer consumables. However, you can’t claim additional deductions for these items if you choose this method.

The actual cost method involves calculating the exact portion of your home running costs attributable to work. This method might be beneficial if you have high running costs or a dedicated home office. However, it requires more detailed record-keeping.

5 Burning Questions About Work From Home Claims

1. Is there a minimum number of hours I need to work from home to claim a deduction? No, there's no minimum number of hours. However, you must be working from home to fulfill your job duties, not just casually checking emails or taking calls.

2. What records do I need to keep for the 67-cent method? To claim a deduction using the fixed rate method, you need to keep records of all hours worked from home between 1 July 2023 and 30 June 2024, including start and finish times. Records can be kept in a diary, spreadsheet, rosters, or timesheets and must be made at the time of work or shortly afterwards. Estimates or representative records are no longer accepted.

3. What is a practical way to record work use of my phone under the actual method? A straightforward way to calculate the deduction is by keeping a diary for a consecutive 4-week period. This diary can be either in paper or electronic form, documenting the computation of work-related usage percentage (e.g., work-related phone calls or time spent using the internet for work versus personal use). The log from a continuous 4-week period showing work-related usage can then be used for the rest of the financial year to determine the total deduction.

4. Can I claim home office equipment? For work-related office furniture like chairs, desks, computers and accessories, you can claim deductions for depreciation, repairs, and maintenance. Items costing $300 or less used mainly for work can be claimed as an immediate deduction when purchased.

5. Can I claim rent or mortgage interest as a work-from-home expense? In most cases, no, unless you have a designated area in your home specifically used as a 'place of business'. If you plan to deduct occupancy costs, there could be capital gains tax (CGT) considerations related to your home.

If you are unsure about handling your tax return, seek professional help.