The ATO has released its final guidance on home office claims moving forward in the 2023 financial year. With COVID lockdowns now thankfully behind us, the ATO has scrapped the concessional home office claim methods which were available to taxpayers in the 2021 and 2022 financial years.
The ATO has now replaced this with a new 67 cents per hour rate. The good news is that just like the COVID relief period, this rate can be used by all taxpayers and does not need a separate home office area to be maintained. The bad news is the record keeping required to verify the use of this rate has increased substantially and is likely to catch many taxpayers unaware.
This new rate requires taxpayers to keep records to document every home office hour. An estimate based on usual working hours will not be sufficient and the ATO expects a log to be kept. The only concession from the ATO is that the usual estimate can be used until 28 February 2023. However from 1 March, taxpayers will be expected to keep a log and many will be aware of this change.
In addition to this, taxpayers must keep receipts for gas, electricity and internet bills to prove the additional home office costs have been incurred. Although lower than the COVID relief 80 cents per hour claim, this new fixed rate does allow for deprecation of computers and office furniture to be claimed in addition to the set rate.
The other option to claim working from home expenses remains the actual method which involves claiming the business related portion of all home office costs. This is a crucial area for taxpayers to get right to minimise their tax, so if you have any queries or need any assistance, please do not hesitate to contact us.