In the past few years, working from home has become increasingly common. This is a consequence of the COVID19 pandemic as well as an increasing reliance on technology. In fact, by the end of 2021, more than 40% of Aussies worked from home regularly. If you work from home, you might be able to take advantage of some of these work from home tax write offs.
Any expenses relating to your work typically qualify for tax deductions. This keeps more of your income in your own pocket, and it saves you quite a bit of stress during tax season. Whether you work from home full-time, part-time, or on occasion, keep reading for a quick list of work from home tax write offs.
When Can You Write Off an Expense?
First, what exactly can you write off as a business or working expense? Unfortunately, you can’t write off anything you use once or twice for work as an expense. In the eyes of the ATO, you can only claim expenses that are related exclusively to work activities.
That means if you work from home occasionally, for example, you can’t write off your home desk if it’s not exclusively used for business-related purposes. This can get tricky, especially if your home office space doubles as something else, like a craft room, guest bedroom, etc. You also need to be working from home to fill your primary work duties, not just do minimal tasks (answer emails, phone calls, and so on). In other words, when you work from home, you need to be incurring real expenses that can be written off.
Top Work From Home Tax Write Offs
Now, let’s examine some of the most common work from home tax write offs. You might be surprised how many of these you can use, so make sure you’re not leaving money on the table that could be in your own pocket.
- Occupancy expenses: Any place in your home that’s exclusively used for work activities (like a home office) could qualify you to deduct a portion of your rent, mortgage, land taxes, and so on.
- Office equipment: Office equipment like computers, telephones, printers, and more qualify for a full-value write off.
- Work phone: You can also deduct a portion of your phone bill if you regularly take business calls away from your workplace.
- Cleaning: Any professional cleaning expenses for a dedicated home office space are work from home tax write offs.
- Repairs: Similarly, if you need repairs to your office space, tech, or furniture, this might be a write off.
- Utilities: Any utilities specifically for your home office (heating/cooling) could apply.
- Stationary: Paper, pens, and other general office supplies purchased for work are also work from home tax write offs.
While there are a lot of things you can claim, there are some things the ATO doesn’t allow. This includes things like coffee, tea, milk, or other household items. Even if you might get these for free at work, they’re considered personal costs. If your employer provides any equipment or stipends for your home office, you can’t deduct these either. That means if your employer reimburses you for a laptop, for example, you can’t write this off later on your taxes.
How to Claim Work From Home Tax Write Offs
How do you claim these expenses above, if you qualify? No matter which method you choose, make sure you’re keeping accurate records. You should keep a copy of any receipts for things you’ve purchased related to your home office, as well as office expenses. Similarly, you can use a money tracking app.
If you’re tracking things like phone calls or miles driven, you’ll need to make sure these are itemised. Keeping a diary of your work outside of the physical office can save you a lot of time during tax season, though it can be time-consuming.
Alternatively, you can use a fixed rate instead of keeping detailed records. The ATO sets the fixed rate at 52 cents per hour for every hour of work away from the office. These can apply to office expenses and more. If you choose this method, you can’t make any additional claims. In some cases, each method will be more valuable depending on your unique costs. This is why it’s helpful to keep clear records and work with a professional when needed.
Prepare for Your Work From Home Taxes
Ultimately, working from home has a lot of advantages. Still, it can take a toll on your home office, tech tools, and even the value of your space. This is why it’s important to know this quick list of work from home tax write offs. The more familiar you are with the expenses in your work life, the easier it is to save money during tax season.
Are you lodging your taxes? The team at Debt Busters are here to help! Let our experts guide you toward the best options for your budget, situation, and financial goals. Call us today on 1300 368 322.