Claiming tax deductions is being simplified and more accessible for people working from home.

The Australian Taxation Office (ATO) has devised a new method for work-related tax deductions in light of more people working from home due to COVID-19 (coronavirus). This will allow people to claim 80 cents per hour for all running expenses instead of needing to calculate costs for specific running expenses.

Assistant Commissioner Karen Foat explains in ATO’s statement, “If you choose to use this shortcut method, all you need to do is keep a record of the hours you worked from home as evidence of your claim”. (https://www.ato.gov.au/Media-centre/Media-releases/New-working-from-home-shortcut/)

Other factors include:

  • Multiple people living in the same house will also be able to individually claim the new rate.
  • The new method is optional and taxpayers opting to use the original claiming method will be required to correctly apportion their expenses between private and business use.
  • The requirement to have a dedicated work-from-home area has also been removed.
  • “Claims for working-from-home expenses prior to March 1, 2020 cannot be calculated using the shortcut method and must use the pre-existing working from home approach and requirements,” – Assistant Commissioner Karen Foat

The simplified process can assist people through this difficult time to make it easier to figure out how much can be claimed.

This change will be actioned from March 1 to June 30, which will then follow the ATO’s analysis of the arrangement for the next financial year. However, if shutdowns persist into the next financial year, this arrangement is likely to be extended.

Karen Foat confirms, “We can’t predict the future … but if people are still being encouraged to work at home by the Government then we would extend it into the new financial year.”