Working from Home Deduction Changes for 22/23
How you calculate working from home deductions will change for the coming 2022-23 tax returns.
If you’re working from home, you can deduct expenses you incur to work from home such as stationery, energy and office equipment. You can claim tax deductions for home-based business expenses if you operate some or all of your business from home.
To claim working from home expenses, you must:
- be working from home to fulfil your employment duties, not just carrying out minimal tasks, such as occasionally checking emails or taking calls
- incur additional running expenses as a result of working from home
- have records that show you incur these expenses.
To calculate your deduction for working from home expenses, you must use one of the two methods set out below.
Actual costs method – in order to use this method, you need to keep records of every expenses incurred and depreciating asset purchased as well as evidence to show the work related use of the expense and depreciating assets.
Revised Fixed rate method – this is the method that has been revised. The revised rate increases your claim from 52 cents to 67 cents per hour. However this rate includes internet, phone stationary and computer consumables. Cleaning expenses and depreciation on office furniture are no longer included in the fixed rate.
When using this method, you’ll need to:
- Keep a record of actual hours worked from home. The ATO suggests a diary, timesheets, rosters, logs of time or the use of time-tracking apps. They will no longer accept estimates or a 4 week representative diary.
- The new record keeping requirements apply from the 1st of March 2023.
- Additionally you’ll need to provide at least one receipt/invoice for each type of expense as evidence that you actually incurred that expense.
If you have any queries or questions in regards to business expenses or expenses related to working from home please get in contact with us at STS Accounting.
