What Can I Claim Working From Home On My Tax Return 2020

Tax time is exciting for some people but a complete nightmare for others. Depending on your income and claims within a financial year, you may end up owing tax – or you could set yourself up for a decent tax refund. If you're planning on doing your own tax return this year (and therefore not relying on an accountant to cover all the available claims), you may be wondering: "what can I claim on my tax return?" There are some obvious things that everyone knows, like office supplies and uniform cleaning costs, but did you know that there are some new things you can claim in 2020? Read on to find out more.

What Can I Claim?

Are you asking yourself "what can I claim tax back on?" Take a look at the list of expenses below for a simple guide to what you can claim on your tax return and how to meet the Australian Taxation Office's (ATO) conditions.

Work-Related Utility Expenses

These may include the following expenses:

  • The cost of electricity and gas for cooling, heating, and lighting
  • The decline in value of home office furniture, such as desks and chairs
  • The decline in value of devices including phones, computers, and laptops
  • Phone expenses
  • Internet expenses
  • Cleaning, if you use a dedicated area for work
  • Computer consumables and stationery, such as printer ink.

Please note that these should not be calculated as part of your return if you are using the shortcut method (explained in the next part of this post), since the shortcut method works as a catchall for these expenses.

Occupancy Expenses

Occupancy expenses include the cost of working from home if you are running your own business. You can only claim deductions for the business part of expense – so, if you make both personal and business calls from your mobile phone, you can only claim a deduction for the business portion of those calls (not the private ones). This expense category covers:

  • The expenses you pay to own or rent your home including rent, mortgage interest, water rates, land taxes, and housing insurance premiums
  • Phone and internet expenses
  • Running expenses – that is, electricity costs for heating, cooling, and lighting
  • Cleaning costs
  • Decline in value plus the cost of repairs for items such as furniture and business equipment.

Phone And Internet Expenses

If you wish to claim internet, mobile phone and home phone expenses, you'll need to be able to meet the following conditions:

  • You must have spent the money yourself
  • The expense must be directly related to your income
  • You must have records to prove you have spent the money.

Shortcut Deductions Calculation Method

If you're one of many employees who have moved to a work from home position during 2020 as a result of the global COVID-19 pandemic, you may be unaware that this can affect your 2019-20 tax refund. For the 2019–20 income year, the Australian Taxation Office released a shortcut method to make calculating your working from home claims much easier. The shortcut method allows you to claim 80 cents per hour worked from home between the 1st of March to the 30th of June 2020. This method can also be applied to the period of the 1st of July 2020 to the 30th of September 2020, but keep in mind this period will fall into the 2020-21 income year.

For more information on these methods, visit the ATO website.

There are also two other methods available: the fixed rate method (at 52 cents) and the actual cost method. However, for most people, the new shortcut method is the easiest way to calculate your claim.

What Can't I Claim?

The good news always has to end somewhere. Here's what you cannot claim in your 2019-20 tax return.

Household Items

While computers, desks and printers can be claimed if you are working from home, other things that might seem necessary to your work day – such as a coffee maker – cannot be deducted.

Related To Home Schooling

Unfortunately, personal costs associated with home schooling are not deductable, according to the ATO. This includes costs incurred while setting your children up to do online learning, teaching them at home, and purchasing items such as sporting equipment, iPads and desks.

If you're looking for a little extra cash to top up your tax refund this year, consider a little loan from Sunshine Loans. We follow responsible lending practices and are headed by a professional team. Talk to us today or apply online, or get some more financial advice from our blog.