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The ATO has recently released a draft tax guidance (PCG 2022/D4) for claiming tax deductions for working from home.
From 1 July 2023 the taxpayer can only:
From 1 July 2023, the 80 cents per hour shortcut method is no longer available. If a taxpayer is unable to use the revised fixed-rate method, they will need to use their actual expenses to claim a deduction.
The fixed rate method has undergone a significant overhaul, affecting how taxpayers claim their home office expenses. The key changes are as follows:
Increased Fixed Rate: The hourly rate has been raised from 52 cents to 67 cents for every hour worked from home. This adjustment aims to accommodate the rising costs of running a home office.
Inclusion of Expenses: Under the revised fixed rate method, several expenses that were previously claimed individually are now covered within the 67 cents per hour rate. These expenses include internet costs, mobile phone expenses, electricity and gas for heating, cooling, and lighting, as well as stationery and computer consumables.
Additional Deductions:
Despite the limitations of the fixed rate method, there are still some expenses you can claim separately:
Record-Keeping Requirements:
You need to keep the following records to prove your working from home tax deductions for the 2023 financial year:
For the 2023-24 tax year onwards, you must keep a record for the entire year, for all the hours you worked from home.
You must record these hours regularly, throughout the year, using one of the following methods:
Actual Cost Method remains unchanged. This method allows you to claim the actual costs of working from home as individual expenses.
This includes electricity, home and mobile phone costs, internet expenses, stationery, office consumables, and equipment below $300, as well as the depreciation of furniture and equipment exceeding $300.
To use this method, you need: either a record showing
You must also keep records that show:
Our expert accountants at OneHQ Accounting will help you choose the best method for maximizing your tax return based on your individual circumstances. If you have any questions, require assistance, or would like to discuss any of the above changes, please contact our office so we can help you to maximise your tax deductions in your 2023 and future year Tax Returns.