Working from home? Keep the ATO at bay

For Individuals | Tax
September 19, 2018

In today’s technological age the number of people working from home is on the rise. Home offices set up with phone, internet and a good dash of self-discipline to stay focused is all a lot of people need to get their jobs done. And working from home definitely has its perks with more flexibility, greater work-life balance and an escape from an over -abundance of office meetings.

Just don’t fall into the trap of seeing extra tax claims as one of your perks.

Home office claims are one of the most common claims people make on their tax return – and you really need to know the laws to avoid the ATO coming knocking on that home office door of yours.

Phone and internet are among the most commonly claimed work-related expenses. If you’re going to claim a percentage of your total bill for work, make sure you have documentation to justify it. Otherwise the ATO can cut your deduction down to just $50.

Depreciation of your computer, printing and stationery are all allowed, again as long as you have supporting receipts.

But the ATO has reiterated that home office workers are frequently claiming the entire amount of expenses such as internet, home phone and mobile phone, rather than just the portion allocated for work related business.

Here’s a few tips to remember if you’re working from home:

  • If you’re making claims, ensure they are for a dedicated home office space – answering your work emails from your phone in between privately surfing the net just won’t cut it.
  • When it comes to home internet, home phone and mobile phone you must be able to prove the percentage you are claiming is actually for work related activity – so keep itemized accounts.
  • You can only claim the work-related portion of running expenses for your office space.
  • Mortgage payments, land taxes, rates or rent cannot generally be claimed.
  • Finally – record keeping, record keeping, record keeping! We recommend you keep a logbook for four weeks detailing the number of hours per day worked from home.

For assistance on individual tax returns, talk to us today.

(Image Credit – Annie Spratt on Unsplash)

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