Are you eligible for this easy, $1,000+ tax deduction?
What you should (and shouldn't) do on your tax return this year if you work from home.
It's tax time!
And if you've worked from home at all over the past financial year, it's likely you can claim a tax deduction for this.
Those who work full time from home can claim a tax deduction upwards of $1,400 in this year's tax return.
But even if you don't work at home full time, you could still be eligible to claim a deduction this year.
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Who is eligible to claim a tax deduction for working from home?
Anyone who has worked from home at some point in the financial year is able to claim a tax deduction for this.
There is no set minimum time that you need to have spent working from home in order to be eligible to claim.
However the ATO says you do need to have been working from home in order to "fulfil your employment duties, not just carrying out minimal tasks".
This means if all you've done from home is respond to the occasional email or take the odd phone call, you can't make a claim for this.
The ATO says you need to have incurred additional running expenses as a result of working form home.
So for example, if you regularly work from home you could expect to have higher electricity bills.
How to claim a tax deduction for working from home
There are 2 different ways you can cliam your working from home expenses, but the easiest is the fixed cost method.
With this method you can claim 70 cents per hour for every hour you've worked from home throughout the financial year.
If you worked from home 2 days per week for the full year, assuming you worked 8 hour days, that's a deduction of $582.40.
If you worked from home full time at 8 hours per day for 52 weeks of the year, that's a total deduction of $1,465.
You're not limited to claiming 8 hour days, though. If you regularly work 9 or 10 hour days from home, you can claim this.
You don't need to have a dedicated home office space to claim.
You will, however, need to be able to prove your time spent working from home if asked by the ATO. This could be via a work calendar, diary log or timesheet.
If you're using this method, you shouldn't also claim things like your phone bill or internet plan separately - it's an all inclusive, catch-all deduction.
You could also choose to use the 'Actual cost method' instead of the fixed cost method to claim your working from home expenses, however this is more complicated.
With this method you need to take your individual home running expenses, such as your electricity usage, and calculate the hours that were for work use versus private use.
If you want help lodging your tax return this year, it's worth noting that the cost of using a tax agent or tax accountant is tax deductible.
Want more tax time tips? Here's our guide on how to save money on tax.
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