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How to claim your home Internet and mobile phone bills on tax
You can claim a tax deduction for a portion of your Internet and phone bills, but you need to be able to show your calculations.
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With a surge of Australians now working from home due to the coronavirus outbreak, it's likely that your home Internet and mobile usage is growing. Make sure you know how to figure out the amount you've used for work purposes so you can claim tax back on your Internet and phone bills when it comes to the end of the financial year.
How do I claim my Internet and mobile phone bills as a tax deduction?
When it comes to tax time, you should be looking for every single deduction you’re eligible for, which includes your Internet and phone use. However, it's only allowed if you’ve also studied a course to help improve your career, or if you work from home.
Claiming your home Internet use on tax
The following steps outline how to figure out the amount you can claim back on tax:
- You estimate what percentage of your Internet use is for work purposes. For example, if you think you use 20% of your internet on work purposes, then take 20%.
- Work out 20% of your monthly Internet bill.
- Multiply your monthly work-related internet bill by 12 to give you a figure for the year, or whatever period you've spent working from home.
Claiming your phone bill on tax
If you use your phone for work then you may also be able to claim the cost of work-related usage on your tax return. Like Internet usage, you can only claim the cost of mobile phone usage that relates exclusively to your work. For example, checking work emails on your phone and making work-related phone calls would be considered work use. Working it out is very similar to your Internet use:
- You estimate what percentage of your phone use is for work purposes. For example, if you think you 40% of your phone use is for work purposes, then take 40%.
- Work out 40% of your monthly mobile plan bill.
- Multiply your monthly work-related phone bill by 12 to give you a figure for the year.
How to make sure you're claiming your Internet and phone use correctly
You can only claim a tax deduction for the portion of your bills that relate to your work use, not personal use, and you need to be able to show your calculations to the Australian Taxation Office (ATO) if you're asked to. The ATO monitors tax returns each year to check people are claiming deductions that they're entitled to claim. If you claim too much, or you can't show your calculations when asked, you won't get the tax deduction and you could also be hit with a fine.
Make sure you've kept records of your Internet and phone bills, or that you're keeping a diary to lodge your usage in case you're asked to produce evidence if your tax return is reviewed.
Using a tax agent is one way to make sure you're claiming the full amount of your home Internet and phone bills that you're eligible for, and they'll be able to help do the calculations for you.
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Looking for more things to claim?
We've got a comprehensive guide on what you can and can't claim as a tax deduction this year.
Click here for our full guide to tax returns.
DISCLAIMER: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information applicability to their own particular circumstances.
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