IMPORTANT CHANGES TO CLAIMING WORKING FROM HOME EXPENSES!

The Australian Taxation Office (ATO) has made changes to the way that taxpayers can claim deductions for costs incurred when working from home. From the 1st of March 2023, the following changes came into effect:

RATE

The fixed hourly rate has increased from 52 cents to 67 cents for the 2023 financial year.

WHAT THE REVISED FIXED RATE COVERS

The fixed rate covers:

  • Electricity & Gas

  • Internet

  • Phone Usage

  • Stationery and;

  • Computer Consumables.

Please note: No other deductions for expenses covered by the rate can be claimed if you use this method. For consumable items (such as stationery or ink cartridges), you must keep at least one receipt for an item purchased.

WHAT CAN BE CLAIMED SEPARATELY

You will be able to claim depreciation for items such as computers and office furniture as well as the repairs and maintenance of these assets on top of the fixed rate method. Please note these costs may need to be apportioned for private use.

RECORDKEEPING

The ATO have outlined that records of hours worked must be kept and this has changed compared to the 2022 financial year. You will need to be able to provide a representative record of the total number of hours worked from home during the 8-month period to 28th February, 2023. From 1st March, 2023 actual records must be kept, not just a representative. The ATO will accept any of the following;

  • Timesheets

  • Rosters

  • Logs of time you spent accessing employer systems or online business systems

  • Time-tracking apps

  • A diary

You must keep records of each expense incurred which is covered by the fixed rate per hour (for example, if you use your phone and electricity when working from home, you must keep one bill for each of these expenses).

The ATO have made this a focus area and are tightening up on it as a deduction. Please ensure that your record keeping practices extend to the above if you are wanting to claim a deduction for Working from Home in the 2023 financial year.

If you have any questions regarding the working from home changes, please don’t hesitate to contact our office to discuss with our accountants.

Milanese & Co Accountants