Working from home or running a business from home? Here’s what you can deduct

A lot more people have been working from home because of the COVID-19 crisis.

To make it easier for people to claim deductions for working from home due to COVID-19 (even if not operating a business), the ATO will allow a rate of 80 cents per hour for running expenses and work-related phone and internet expenses incurred up to 30 June 2021.

If you do operate your business from a home office, you can deduct the expenses of running that office. A home office is a room in your home that is used exclusively (or almost exclusively) for business activities.

If you don’t have a home office, you can still claim “working from home” expenses, including:

  • running expenses – these are the increased costs from using your home for your business, including electricity or gas charges for heating, cooling and lighting, cleaning costs and the decline in value and the cost of repairs of deprecating assets such as furniture, furnishings and equipment; and
  • work-related phone and internet expenses, including the decline in value of a relevant device (e.g. handset, computer or laptop) – an apportionment will be required if the device is not used exclusively for work.

Tip! If you are working from home, talk to your tax adviser in order to maximise the tax deduction you can claim.

Read our complete April 2021 TaxWise Individual Newsletter here

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