Tax Return:: Changes to the 2023FY Working From Home Deduction
Hello, this is your tax accountant, P&C Tax Professionals.
As of 16th February 2023, the ATO has updated their working from home deduction effective from the 2023 financial year and onwards.
From the 2022-23 financial year, the methods you can use to calculate your working from home expenses are as follows:
> fixed rate method (revised)
> actual cost method.
The actual cost method remained the same but the fixed rate method has been revised and updated in line with the contemporary working from home arrangements, allowing you to avoid cumbersome apportionment calculations.
Since no changes have been made to the actual cost method, you can refer back to our previous blog post on Working From Home Expenses (Actual Cost Method) via our blog post link: https://en.pnctax.com.au/single-post/tax-return-working-from-home-expenses-actual-cost-method.
The revised fixed rate method contains the following information:
> the fixed rate has increased from 52 cents to 67 cents per hour you have worked from home
> it is no longer a requirement to have a dedicated home office space
> the fixed rate includes expenses such as:
- electricity and gas
- phone and internet usage
- computer consumables (paper, ink, etc.)
- stationery
> taxpayers are able to separately claim the work-related percentage of the decline in value of depreciating assets which may include office furniture and technological devices.
Furthermore, the revised fixed rate method can now also be used by businesses that either partially or fully carry out their operations from home.
If you have decided to use the fixed rate method for your 2022-23 tax return, you would need to have the following information:
> From 1 July 2022 to 28 February 2023: a record that is representative of the hours you have worked from home
> From 1 March 2023 to 30 June 2023: a record that shows the total number of hours you have worked from home (this can be in the form of a timesheet, roster, or diary). In addition, you would also need evidence that you have paid each of the expenses you are claiming for as part of the fixed rate method (e.g., your monthly phone or electricity bill). You would also need to keep all of your tax invoices for any depreciating assets you have purchased for your home office which shows the details of the supplier, product description, purchase price, and purchase date.
In the meantime, for any further enquiries or questions, please feel free to contact us through our official Facebook Page (P&C Tax Professionals – Australia) or simply send us your questions to our email address at pnctax@naver.com.
Thank you and bye for now!