Updated: Oct 9
Introduction to Home Office Expenses and COVID-19
With the outbreak of COVID-19, many people have been forced to work from home. As a result, they may be eligible to claim certain expenses as tax deductions, including heating, cooling, lighting, cleaning, internet, phone bills, and office equipment.
Eligibility Criteria for Claiming Home Office Expenses
To be eligible to claim home office expenses, you must meet certain criteria, including:
You must have incurred the expenses while working from home due to COVID-19
You must have a dedicated work area in your home
Your work must require you to have an office space at home
Two Methods for Calculating Home Office Expenses
There are two methods for calculating home office expenses:
The fixed rate method, which allows you to claim a flat rate of 52 cents per hour for every hour you work from home (From 1 July 2022 it is 67 cents)
The actual cost method, which allows you to claim the actual expenses you incurred while working from home
What Expenses Are Allowable and Non-Allowable
Allowable expenses include the costs associated with running your home office, such as electricity, gas, and internet. Non-allowable expenses include the costs associated with your home itself, such as mortgage interest, rent, and property taxes.
Keeping Accurate Records of Home Office Expenses
To claim home office expenses, you will need to keep accurate records of your expenses throughout the year. This will include keeping receipts, bills, and invoices. You should also keep a logbook of the hours you spend working from home and the tasks you complete during that time.
How to Claim Home Office Expenses
To claim home office expenses, you will need to complete the "Home office expenses" section of the tax return form. If you use the fixed rate method, you will need to provide the total number of hours you worked from home during the year. If you use the actual cost method, you will need to provide a detailed breakdown of your expenses.
Examples of Home Office Expenses You Can Claim
Heating, cooling, and lighting expenses
Internet and phone bills
Office equipment, such as a computer, printer, and desk
Home office repairs and maintenance costs
How to Maximise Your Home Office Tax Deductions
To maximise your home office tax deductions, you can use tax apps, such as TaxFox. With TaxFox, you can easily keep accurate records of your expenses throughout the year and ensure that you claim the correct amount.
Claiming home office expenses can be a valuable way to reduce your tax bill. With the outbreak of COVID-19, more people than ever are working from home, making it even more important to understand how to claim these expenses. By following the eligibility criteria, choosing the right method for calculating your expenses, keeping accurate records, and using tax preparation software like TaxFox, you can maximise your deductions and save money on your taxes.