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Working-from-home tax tips: Beware the 80-cent shortcut

Using the 80-cent shortcut method could give you a smaller refund.

Using the 80-cent shortcut method could give you a smaller refund. Photo: Getty

It might be tempting to take the easy way out if you’ve been working from home and default to the shortcut rule for your tax this year.

But there are other methods to claim your expenses that might give you a better return, depending on your circumstances.

Under the shortcut deduction rule, you can claim 80 cents per hour that you worked from home and this method covers all work expenses like heating, electricity, phone, internet and stationery.

Your other option is to use the 52 cents an hour fixed rate method, which includes electricity and gas for heating, cooling and lighting, the decline in value for home office furniture like a desk and any repair costs for home office equipment or furnishings. But to use this method, the ATO says “you need to have a dedicated work area, such as a home office when you work from home”.

STS Accounting Group director Margaret Leigh said if you choose the fixed rate method, you can then also claim other work expenses, like your phone, internet and stationery separately.

“Nine times out of 10 when you add it all together it comes up at way over the 80 cents per hour,” she said.

“So while one is an easy way it’s actually generally not the best way if people have got reasonable records.”

Working from home tax return

Whether you choose to use the shortcut or fixed rate method, you need to have records of your hours worked from home like timesheets, diary entries or rosters.

You must be able to prove any expense you claim is connected to your work duties.

More than two-thirds of working Australians are planning to claim more expenses this year than previously, according to a recent survey of over 1,400 people for Officeworks.

But the same survey also found more than half of respondents weren’t crystal clear on exactly what they can and can’t claim.

So, here’s a handy guide:

Things you can claim

  • Home office equipment, including chairs, desks and monitors
  • Depreciation of office equipment such as laptops, mobile phones and printers
  • Energy for heating, lighting and cooling during work hours
  • Internet and phone use for work

Things you can’t claim

  • Rent or mortgage repayments
  • Council rates
  • Household items like tea, coffee and milk
  • The cost of cleaning everyday clothes you wear during work hours

If you’re wondering whether you can claim something you in which you have both a personal interest and it is connected to your work, like a subscription to an industry publication, then you may be able to claim a portion of it.

Ms Leigh said if you have more expenses related to working from home in 2020-21, then the tax office expects other expenses you might have claimed previously, like travelling between worksites or business trips, for example, to be lower.

If you have been working from home during the pandemic but travelled to your usual office sometimes, you can’t claim the cost of travel from home to work because this is considered a private expense, the ATO said in a statement.

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