Your guide to beating the tax man: Experts reveals the tricks to pocketing more cash this year – and why claiming the working from home rate could cost you MORE
- Australians working from home can claim a flat rate of 80 cents an hour on tax
- Tax agent H&R Block calculated this would typically yield a tax refund of $450
- Mark Chapman said itemising phone, internet, power bills worth $900 refund
- Those who claimed cost of new desk, chair up to $300 could get back $1,600
- Here’s how to help people impacted by Covid-19
Australians working from home who claim a standard hourly rate to save on paperwork could be forgoing generous tax refunds of more than $1,000.
H&R Block calculated that someone claiming the flat rate of 80 cents since March would typically get back $400 to $450 – or only a quarter of the $1,600 they could possibly claim.
The tax agent’s director of tax communications Mark Chapman said the Australian Taxation Office’s simplified rules for those working from home during the COVID-19 pandemic could potentially see someone miss out on more than $1,000 worth of refunds.
‘It’s very likely that you’ll be missing out on deductions,’ he told Daily Mail Australia.
H&R Block calculated that someone claiming the flat rate of 80 cents since March would typically get back $400 to $450 – or only a quarter of the $1,600 they could possibly claim. Pictured is Victoria Bowes working from home in Adelaide in early April
‘As a general rule, for most typical people who are working from home, if you claim the 80-cent rate, it’s nice and easy, it’s easy to calculate, you don’t have lots of substantiation requirements but you’re almost certainly going to get a lower deduction.’
Mr Chapman said there was a drawback with the new, simplified tax deduction rules.
‘Generally speaking, whenever the ATO puts forward these flat rate allowances, you can pretty much guarantee that there’s a trade-off,’ he said.
‘The ATO is saying: “We’ll make life easy for you, we will take all this difficult record keeping and all of these difficult calculations off you but we’ll give you this flat rate.”
‘In exchange, you’re not going to get as big a deduction as you would otherwise.’
Mr Chapman said someone claiming a lower 52 cents an hour rate, on top of their work-related phone, internet and electricity bills, was more likely to get a refund of $850 to $900.
A tax refund could stretch to as much as $1,600 if an individual working from home claimed the cost of a new desk, chair or occupation-related item worth up to $300.
‘If you’ve got your paperwork, if you’ve got all of your expenses, if you can work out the amount that relates to your home office, the amount of time that you’re using that home office for work purposes, and you can prove all of that, you’re going to be a lot better off,’ Mr Chapman said.
The tax agent’s director of tax communications Mark Chapman said the Australian Taxation Office’s simplified rules for those working from home during the COVID-19 pandemic could potentially see someone miss out on more than $1,000 worth of refunds. Pictured is a Sydney man working from home on a Zoom call
More expensive items like laptop computers and mobile phones can only be claimed as tax deductions over two years to account for depreciation.
In the first week of April, the tax office and Assistant Treasurer Michael Sukkar announced that Australians working from home could claim a flat 80 cents an hour rate for work done at home between March 1 and June 30 as an alternative to ‘needing to calculate specific running expenses’.
‘The short-cut deduction method will make it easier for many Australians who are working from home for the first time due to COVID-19 when it comes to accurately completing their tax return,’ Mr Sukkar said at the time.