Individual clients should also be aware of the changes to the work from home deduction for the 2022/23 financial year. During the COVID pandemic, the ATO introduced a temporary shortcut method of claiming home office expenses. This shortcut method allowed individuals to claim 80 cents for each hour worked from home. This method ceased on the 30 June 2022, and a revised fixed rate method introduced.
To be eligible to claim a deduction for working from home expenses, clients must:
- Incur additional running expenses due to working from home
- Be fulfilling employment duties while working from home
- Keep records to prove the cost incurred
For the 2022/23 financial year, office workers who work from home can claim 67 cents an hour under the revised rate method, or alternatively use the actual cost method. Under the revised fixed rate method, there are two important time periods requiring different documentation to record the hours worked from home:
- Prior to March 1, clients must have diary entries or some proof covering a four-week period between 1 July 2022 to 28 February 2023
- From March 1, 2023, clients must keep a complete record of all the hours they work from home for the period to June 30, 2023. This can be in the form of timesheets, rosters or a diary.
In addition to the record of hours worked, evidence of payment of home office expenses is required. A copy of at least one bill for each type of working-from-home-expense, such as electricity, phone, computer consumables, stationery should also be provided.
Under this approach a separate deduction can be claimed for the decline in the value of assets used while working from home, for such items as computers and office furniture. The repairs and maintenance of these items can also be claimed, along with the cleaning expense of a dedicated home office. To make a claim for the decline in the value of assets you will need to have records to support the purchase of the item, when it was used, percentage of work-related use and the effective life of the asset.
Should you require any further information regarding the working from home deduction please refer to the following link: Working from Home Deductions
Please note these changes necessitate more detailed record keeping by individual clients in order to substantiate the working from home claim.
Our individual tax data organiser will assist in identifying the required information to make a working from home claim for this financial year. The organiser includes an electronic ‘Work from Home Diary’ which, if applicable to you, will be a time saving tool!
If you require any further information please contact our office.