How time flies! We’re now in the second half of 2021 which also means its tax time! For some, tax time can be daunting, especially for small business owners who have the responsibility of lodging their business and personal taxes on time. But with the gradual increase of businesses and employees working from home due to the covid-19 pandemic, less time is being spent in the office and more time is being spent working in the comforts of our own homes. This then comes with the added bonus of the ability to claim more back on your taxes.
If you are an employee with working from home arrangements, you may be able to claim a deduction for certain expenses when it comes to lodging your tax.
Employees who work from home can claim on any expenses bought for the purpose of work from the period of the 1 July 2020 to 30 June 2021 (2020-21 tax return).
So, make yourself a cuppa, grab those receipts (you’ve hopefully held onto) and your calculator and let’s sit down and find out what you can claim back this 2020-21 tax period.
Am I eligible to claim these work from home deductions?
In order to be make a tax deduction claim due to working from home, you need to be able to meet these three criteria:
- You have personally spent the money on the expense
- The expense is directly related to your work and required for you to earn your income
- You must have proof of purchase.
What can I claim?
Expenses such as:
- electricity expenses (such as heating, cooling and lighting) used in order to be able to perform your work duties at home
- cleaning costs to maintain a clean work area
- phone and internet expenses
- computer consumables and stationery (for example, printer paper and ink)
- home office equipment including computers, printers, phones, furniture and furnishings which are essential for your to perform your work duties at home. You can claim either the
- full cost of items up to $300, or
- the decline in value (depreciation) for items over $300.
What can’t I claim?
You cannot claim on:
- Any expenses that have been reimbursed by your employer or on items which have been provided to you by your employer
- General house items (such as tea, coffee, sugar, milk) in which would generally be supplied to you by your employer
- Costs associated with children (for example, child-minding, homeschooling expenses)
- Time spent not working (this means you cannot claim your lunch breaks or time taken away from your work to homeschool children).
I need help? Where can I go for assistance?
Our partners at RSM are happy to talk to any GC hub members about their business accounting concerns. Contact our community manager to organise an appointment with the team at RSM or for further information on what you can or cannot claim for your 2020-21 tax return, head over to the Australian Government ATO website – Employees working from home | Australian Taxation Office (ato.gov.au).