COVID-19 is having significant economic and social impacts. Some of these impacts will hopefully be short term but there are some which may be long term. One impact has been a change in the way Australians work with a requirement for those who can work from home to do so for social distancing purposes. Many believe that employers are discovering that such measures can work and maintain the same levels of efficiencies and as such may continue well after the end of COVID-19.
With so many now working from home it is important that records be kept now to ensure those taxpayers are maximising their returns come tax return time. With the increase of time spent working from home, people should be able to increase the claims they make for their home office.
As a starting point it should be noted that we are referring to home office claims rather than claims relating to running your business out of your home. The former involves claiming for running costs of your home office such as electricity, gas, internet, phone, computer and stationery costs as well as home office furniture. The latter includes all these costs plus items such as council and water rates, rent payments and/or home loan interest. The downside with claiming your home as a place of business is that it results in your home losing the main residence exemption from capital gains tax – i.e. you will pay some tax when you sell your family home which is ordinarily tax free.
So what records need to be kept for home office claims? The easiest claim is a flat 52 cents for every hour spent working from home. So taxpayers should be keeping a general track of the hours they are now working from home. This rate covers their gas and electricity costs. If you are using your home internet connection, home phone or mobile more then you will be able to claim a higher percentage of these costs. You should also keep receipts for printer ink, paper, pens, highlighters, computer costs and home office furniture you have purchased.
If you have queries about your home office claims, please do not hesitate to contact us.
