Although we are in a post-COVID normal, many business owners and employees still work from home in some capacity. This incurs additional costs that can be deductible at tax time. However, you can’t claim everything, so it is important to know what can and can’t.
Home Expenses
To claim any home expenses you must be working from home to fulfil your employment responsibilities, not just carrying out small tasks. You need to incur additional expenses on top of your regular bills from working at home. However, you can’t claim back all WFH expenses.
Firstly, you aren’t able to claim the cost of coffee, tea, milk and other general household items that your employer would normally provide at work nor any items that your employer provides, pays for or reimburses you for. Additionally, any equipment bought for your child’s schooling such as an iPad or desk is not deductible.
On the other hand, you will be able to claim a portion of both occupancy expenses and running expenses related to the time spent working in your home office space. This includes the following:
- Occupancy Expenses: rent, mortgage insurance, rates etc.
- Running Expenses: gas and electricity.
Any money spent on your home office equipment, such as computers, printers, phones and furniture is also tax deductible. Additionally, the depreciation of those items in value to the extent that relates to your home work activity.
Appliances
If you work from home, you cannot claim something that is used for private, domestic or personal purposes, including your home appliances such as a TV or fridge. According to the ATO a deduction must be work related and must be directly related to earning your income.
Phones
When working from home, you may need to use your personal phone for work matters. In relation to phones and devices, you can claim the following:
- work related calls and phone rentals
- a portion of your phone bill reflecting the share of work related use of the phone, as long as you can show you are on a work call or you use the phone regularly when away from work
- if you buy a phone or laptop for work purposes and your employer doesn’t reimburse you
On the other hand, you are unable to claim phone/device related expenses if your employer reimburses you or the costs are incurred prior to employment. Such as using your phone to find employment or employers calling about availability.
If you need further confirmation on what is tax deductible, get in contact with XO Accounting by calling