Changes to Work From Home Deductions – 2023
An ATO review of the new Work-From-Home Deduction methods were announced by the Assistant Commissioner Tim Loh. As the $0.80 ‘Short Cut Method’ was made redundant after the 30th of June 2022, meaning Tax Returns in 2022-2023 will have to use one of two methods when claiming their Work-From-Home Deductions:
1. Actual Cost Method – No changes have been made to the Actual Cost Method, remains very straightforward for Taxpayers who keep records of their Actual Costs incurred during the Tax Year.
2. Revised Fix Rate Method – A rate of $0.67 can be claimed starting from the 1stof July 2023, with certain limits. This rate included expenses such as Phone, Internet, Gas & Electricity. One major benefit Taxpayers gain from this revision is there is no need for a dedicated home office space in order to claim deductions using this method, which was a criteria that was mandatory in order to claim WFH Expenses through the earlier Fixed Rate Method.
Assets & Equipment that decline in value can still be claimed separately, another benefit to the taxpayer as these are typically larger deductions.
To claim this new WFH deductions, taxpayers must be working to fulfill their employment duties, not minimal tasks such as checking emails or taking calls. They must also incur additional expenses as a result of working from home.
The Assistant Commissioner states that the Total Number of Hours worked from home must be recorded to claim through this new method. However, due to the announcement being made in the middle of February 2023, a record that somewhat represents the total hours worked will be sufficient until the 1st of March 2023. After this date, a proper record of hours worked is mandatory.