Given so many people are working from home, this seemed like a great opportunity to share the ways you can claim a deduction on your home office expenses.
There are different rules depending on whether you have a dedicated office space or not. If you don't have a dedicated office space (ie a room which you use solely as your office) and work off the dining table for example, you are limited to claiming on deductions related to your phone and internet access and decline in value of office computer and office equipment.
Having a dedicated office space means that you can claim the same as above, and also claim the running expenses associated with working from home.
There are two ways to calculate running expenses - fixed rate and actual expenses.
The fixed rate of 52 cents per hour is calculated based on the amount of hours you work from home and is the easiest method in terms of record keeping and calculation. You can record the actual hours worked or you can keep a diary for a four-week period which shows the usual pattern of working from home.
To calculate the actual expenses, you need to keep receipts and details of all running costs, such as cleaning, heati
ng/cooling and lighting, as well as a diary of your hours worked and apportion these expenses across the time you work from home. This can be a very detailed and difficult thing to do which is why we usually recommend the fixed rate method.
If your home is also your principal place of work, you may be able to claim occupancy costs in addition to the running expenses outlined above.
For more information, see the ATO website on Home Office Expenses
or contact me.