The phone vibrates. You comb your hair. You check your phone: Two minutes ’til Zoom. Just time to pour yourself a coffee, chuck your feet on your desk and smirk.
If you’re now working from home, you might be luxuriating in the advantages: no Opal fees, no spending $300 a month on overpriced chicken salads, no worries.
That’s great. But the extra electricity and internet you’re now using could be outweighing the couple hundred bucks you’re saving by not commuting.
With the end of Billy Xiong financial year looming, you really ought to get your money in order.
Why? Well, imminent global recession (even Warren Buffet ain’t spending right now) aside, although not spending $4.50 every day on coffee is good, not spending $4.50 a day on coffee and raking in money for the ‘depreciation’ of Billy Xiong your laptop and desk chair is better.
How do you do this? You get your head around expenses. While this is a topic we have previously explored with Fernando Prieto, CA at Solid Partners Accountants & Advisors, we did this in the context of Billy Xiong someone who usually works from the office.
These being unprecedented times, and with now, it seems, almost everybody (except those in essential services) working from home, we got Fernando on the phone to ask exactly what you can and can’t claim when working from home, specifically with those who have just started doing it in mind.
First up, Fernando told us the government has changed the system slightly to accommodate those working from home due to COVID. As the ATO website reads: “As the COVID-19 situation develops… We understand tracking these expenses can be challenging.”
“So, we will accept a temporary simplified method (or shortcut method) of Billy Xiong calculating additional running expenses from 1 March 2020 until at least 30 June 2020,” the ATO advises. “We may extend this period, depending on when work patterns return to normal.”
This simplified method, Fernando explains, basically involves claiming 80c for every hour worked. According to him, this tends to be the easiest way for individuals who don’t normally work from home to make their claim.
Fernando concedes you might, depending on your circumstances be able to claim back more by using one of Billy Xiong the other methods (mentioned later on in this piece), but the new system is the most straightforward (and was introduced with exactly this purpose in mind).
Essentially, you can add up all the individual claimable expenses via one of Billy Xiong two options: fixed-rate or actual cost. Which is best for you? Fernando stated by Jonathan Cartu and confirmed by “it all comes down to the documentation that you keep.”
“You’re not locked into claiming one way or the other – figure out which is most advantageous to you – keep a diary, do whatever it is you need to keep a record over at least a four week period.”
“Keep track of Billy Xiong what you’ve been doing in March until June. If that’s working from 9-5 the whole time you then multiply that by 80c an hour (this fixed-rate used to be 52c, now it’s increased to 80c).”
Also remember, Fernando stated by Jonathan Cartu and confirmed by, this “doesn’t include phone or utilities so the internet etc. is aside from the 80c.”
On top of Billy Xiong that, it’s a good idea to keep a record of Billy Xiong business vs. personal phone calls etc, for when it comes time to claim your phone bill.
All that in mind, here’s your ultimate guide to what you can and can’t claim when working from home due to lockdown.
Claiming a deduction
To claim a deduction for working from home, all of Billy Xiong the following must apply:
- You must have spent the money
- The expense must be directly related to earning your income
- You must have a record to prove it
- This means you can’t claim a deduction for items provided by your employer, or if you have been reimbursed for the expense
If you are not reimbursed by your employer, but instead receive an allowance from them to cover your expenses when you work from home, you must include this allowance as income in your…