Working from Home? Remember to keep your records

• Business News

The ATO has been encouraged to look at reinstating the “working-from-home” temporary shortcut method (which ended on June 30 this year) as the country continues to battle through Covid-19 restrictions.

The call comes as lockdowns are set to continue long term across the country, with many businesses looking at various staffing and office reductions to reduce bottom line spending.

The shortcut method offered those working from home a simple method to keep track of and claim deductions, as well as any other work-from-home expenses. With this method no longer on offer, clients are encouraged to keep a solid record of the hours worked from home and to keep all receipts for items purchased over this time.

“Encouraging your clients to keep appropriate records now will allow you to use the method that will give them the best outcome when calculating their work-from-home deductions in future years.”

Australian Taxation Office

Items such as stationary, ink, paper, power and phone records are all classed as a work-from-home expense and can be claimed as such for the financial year 2021-22. Expenses such as tea, coffee and other general household items cannot be claimed as a deduction.

Any items provided by the employer or reimbursed also cannot be claimed as a deduction (such as lap top computers and mobile phones).

Are you a small business owner that operates some or all of your business from home? Tax deduction claims are applicable in the following categories:

• Occupancy: Rent, rates, taxes, home insurance
• Running Expenses: Electricity, phone, furniture, repairs, cleaning
• Motor Vehicle: Expenses for business related travel

While the temporary shortcut method allowed for a blanket 80 cents per hour tax deduction, small business owners are strongly encouraged to keep a close track of all their expenditure. Also, if your business is entitled to certain GST input tax credits the ATO states that “you must claim your deduction in your income tax return at the GST exclusive amount.”

Interested in learning more about work-from-home deductions? Contact the experienced team at Elevate Accounting for an obligation free chat.