It is that time of year again and there is excitement in the air as the possibility of a tax refund dangles before us.
There is an added air of expectancy this year, because many of us have been working from home for the past three or four months – and surely that means we can claim some of the costs imposed on our household budget?
Yes, we can. Here are outlined some of the things you can expect to be able to claim for.
- Utilities such as heating, cooling and lighting
- Cleaning costs for your work area
- Mobile or landline use for your work calls
- Internet connection
- Computer consumables and stationery
- Repair costs for the home office, such as equipment and furniture
- Depreciation on home office equipment, computer furniture and fittings
- Small capital expenses – such as a computer purchased specifically for working from home (if the cost is under $300). If the cost is over $300, there is a possibility of a claim for the decline in value of that capital purchase.
You Need Proper Documentation
Of course you will have to be able to substantiate your claim by being able to show timesheets or rosters that prove you have been working from home. And of course if your boss picked up the tab for setting up your office, you will not be able to make a claim in that regard.
If you are looking at completing your tax return yourself, you can use a ‘shortcut’ and simply claim 80 cents per hour for your “working from home” costs. This will be labelled as the “Covid Hourly Rate”. The usual date allowance would be between the dates of March 1 to June 30. So if you were working from home prior to that, make sure you state that and can provide evidence.
A word of caution: if you have only been checking your emails at home, or taking phone calls, those are not counted as claimable; you were probably already doing that anyway even when you were still working at the office.
If in doubt, head to the ATO’s Working From Home info sheet for a detailed run-down of what is claimable.
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A Word of Caution for Tax Time
At tax time, I see so many people getting into danger by spending too much while waiting for a possible refund. I call it “Rubber Spending”, because many of us in fact spend our expected tax return money three times over:
- When tax refund time is approaching
- When we complete our tax return
- When the money actually lands in our bank
Don’t be one of those people who end up spending more than they actually receive. Daydream all you want, but wait for the money to actually land in your account before you decide to spend it!
Article supplied with thanks to Coach Chris. About the Author: Chris is a financial coach with a vision for helping people “get their money into great shape” no matter what their income.