CLAIMING WORK FROM HOME EXPENSES IN 2023

CLAIMING WORK FROM HOME EXPENSES IN 2023

ATO has recently revised the way taxpayers claim deductions for costs incurred while working from home. Taxpayers can continue to opt out to use either “actual cost” of “fixed rate” method. Actual cost method remains the same for 2023 income year however some changes have been introduced for the fixed rate method.

Namely, Fixed rate method has increased from 52 cents to 67 cents per working hour. Amongst the changes for 2023, tax payers no longer need to have dedicated home office (if you are to use fixed rate method) in order to claim working from home expenses in their individual tax return.

WHAT’S COVERED BY FIXED RATE METHOD

Revised rate of 67 cents per working hour covers energy expenses such as electricity and gas, phone usage, internet, stationery and computer consumables. Please note that no additional deductions are allowed for any expenses covered by the fixed rate method.

WHAT CAN BE CLAIMED SEPARATELY

In addition to above mentioned fixed rate per hour claim you would be able to claim decline in value of assets used for income producing purposes such as computers and office furniture as well as the cost of maintenance for the same. Cost of cleaning DEDICATED HOME OFFICE could also be claimed as a separate expense providing that you do have a dedicated office withing your household.

RECORD KEEPING

Tax payers need to keep a record for all hours worked from home for entire income year. Please note that ATO won’t accept estimates or a 4 week diary notes under fixed rate method from 1st March 2023. Records outlining total hours worked from home can be in any format providing that they are kept as they occur. We do believe that having a separate diary record for recording time worked from home for the entire income year would be beneficial for clients when it comes to tax time. In addition, records must be kept for each expense incurred that is covered by fixed rate method. For example, as fixed rate covers electricity and phone expenses, you would need to keep one bill for each of these expenses.