How to claim working from home expenses in your tax return this year
The previous 80 cents per hour shortcut method of claiming home office expenses has been cut to 67 cents per hour.
The last few years the Australian Tax Office (ATO) has allowed people to use a shortcut method of 80 cents per hour to claim working from home expenses.
This shortcut method was introduced at the start of COVID when millions more people found themselves working from home.
This method was extended for 2 years throughout the pandemic while a lot of people still worked from home, despite offices being re-opened.
However, you won't be able to use this method for your 2022-23 financial year tax return.
Instead, the ATO has introduced a revised fixed rate method of 67 cents per hour that you worked from home.
How to use the fixed rate 67 cents per hour method
This 67 cents per hour method is a blanket deduction for your home office expenses such as electricity and gas, home internet and mobile plan.
You can use this method to claim your home running expenses for each hour you worked from home during the financial year, from 1 July 2022 to 30 June 2023.
You can't make any additional, separate claims for things like your mobile plan - this method is all inclusive.
As an example, let's look at how this method works for me.
I've worked from home full time this past year. After removing weekends and 9 public holidays, I've spent 251 days working from home.
At 8 hours a day, that's 2,008 hours. I can claim 67 cents for each of these hours, which works out to be a deduction of $1,345.36
What about the actual cost method?
You can use the actual cost method to claim your home office expenses instead of the fixed rate method.
Instead of a blanket 67 cents per hour deduction, this method involves a lot more calculation to work out the actual additional costs you've incurred while working from home.
For example with your electricity expenses this involves working out the cost per unit of power you use, the average units you use per hour and how many of these hours are work related.
For your phone bill you'd need to calculate how many hours each day you use your phone for work purposes versus personal use.
The most important thing to do if you're planning to use this method is to show all your calculations when submitting your claim.