How you can maximise your refund this year: Changes mean Aussies working from home during lockdown can get $500 more back from the taxman
- ATO has brought in a number of changes to assist those affected by COVID-19
- An automatic ‘COVID-hourly rate’ is available for workers to calculate tax return
- The shortcut claims a deduction of 80 cents for each hour worked from home
- This option can be used by multiple people working in the same house
- Workers can opt for other methods if they believe they will get a bigger return
- Here’s how to help people impacted by Covid-19
Australians working from home due to the coronavirus lockdown could be in for a larger tax return this year.
The Australian Tax Office has made a number of changes that could put an extra $500 in the pockets of hard working Australians.
With two out of five Australians working from home since the coronavirus restrictions were implemented, the ATO has provided a simple way to calculate your deductions.
The Australian Tax Office has made a number of sweeping changes that could put back an extra $500 in the pockets of hard working Australians (stock)
An automatic ‘COVID-hourly rate’ is available for workers who want a shortcut to calculate how much money they will earn back (stock)
An automatic ‘COVID-hourly rate’ is available for workers who want a shortcut to calculate how much money they will earn back.
The shortcut claims a deduction of 80 cents for each hour worked from home from between March 1 to June 30 this year.
This option can be used by multiple people working in the same house.
ATO assistant commissioner Karen Foat said the ‘COVID-hourly rate’ shortcut will give Australians who have worked from home an extra $500 in tax return.
‘According to the Australian Bureau of Statistics, over 40 per cent of people are working from home in some form or another,’ she told Gold Coast Bulletin.
Workers can also opt for the other two calculating methods if they think this will earn them a bigger return, as long as there is proof of purchases (stock)
Workers can also opt for the other two calculating methods if they think this will earn them a bigger return, as long as there is proof of purchases.
Under the actual expenses method, workers can claim costs which occurred due to working from home such as electricity and internet bills.
With the fixed rate method, workers claim a deduction of 52 cents for each hour worked from home for additional running expenses such as a decline in value of furniture, electricity, gas, heating, cooling, and repairs.
‘We are trying to make it quite easy for people to claim what they are entitled to, but we also don’t want people to be claiming what they’re not entitled to,’ Ms Foat said.
‘We have sophisticated data matching analysis to spot where returns are not quite right and where we think people’s claims are really high for their occupation and income level.’
What you can and can’t claim on tax while working from home
Expenses you can claim
If you work from home, you will be able to claim a deduction for the additional expenses you incur. These include:
- electricity expenses associated with heating, cooling and lighting
- the area from which you are working and running
- items you are using for work
- cleaning costs for a dedicated work area
- phone and internet expenses
- computer consumables (for example, printer paper and ink) and stationery
- home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the full cost of items up to $300 decline in value for items over $300.
Expenses you can’t claim
- If you are working from home, you can’t claim:
- the cost of coffee, tea, milk and other general household items your employer may otherwise have provided for you at work
- costs related to children and their education, including setting them up for online learning, teaching them at home or buying equipment such as iPads and desks
- items that you’re reimbursed for, paid directly by your employer or the decline in value of items provided by your employer – for example, a laptop or a phone
- time spent not working, such as time spent home schooling your children or your lunch break.
Employees generally can’t claim occupancy expenses such as rent, mortgage interest, water and rates.
Source: Australian Tax Office