Latest Working from Home Guidelines

Continuous training in the world of tax is vital for our accountants to stay up to date with the latest information. From our latest training session our accountants went through the latest in the working from home guidelines for the 2023 financial year.

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One of our Graduate Accountants Christopher Daoud has written the below to help you with your tax returns for 2023.

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As we have moved past the end of the 2023 financial year and look ahead to 2024, many workplaces are embracing the concept of a hybrid work environment or even fully remote employment. Consequently, when it comes to tax time, it becomes essential for individuals to understand the new rules and regulations introduced by the Australian Taxation Office (ATO) for the 2023 financial year regarding work from home deductions. Notably, the previous "shortcut method" of calculating deductions, which allowed for an 80 cent per hour claim covering all running costs associated with remote work, has been discontinued. Moreover, having a designated home office area is no longer a requirement. Instead, taxpayers now have two options: the revised fixed rate method and the actual cost method, each with its own substantiation requirements for claiming deductions.

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The revised fixed rate method enables a deduction of 67 cents for every hour worked from home, covering various additional running costs, which include home internet, mobile phone usage, electricity, gas, and office supplies like stationery and printer ink. This method still allows you to claim separate deductions for the use and depreciation of technology and office furniture in your work. This includes items such as chairs, desks, computers, and bookshelves, which experience a gradual decrease in value over time.

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The actual cost method of calculating work from home deductions involves claiming the specific additional running expenses incurred as a result of working from home. This method allows you to claim deductions for expenses such as electricity and gas usage, internet and mobile expenses, cleaning services, and the depreciation of home office furniture. It is important to note that these expenses should be?apportioned based on their work-related use, and maintaining comprehensive records of these expenses is essential to substantiate your claims.

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Additionally, the ATO has implemented stricter requirements for record-keeping when claiming deductions using either of the aforementioned methods. During a short transitional period between July 1, 2022, and February 28, 2023, individuals are required to maintain a four-week consecutive logbook documenting their work from home hours, which should be representative of their usual routine. Following this period, it is required to log all hours worked from home. Adhering to these record-keeping obligations ensures compliance with the ATO guidelines for claiming deductions related to remote work.

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It is important to consider the above factors when claiming work from home deductions. Understanding the ATO's new rules, choosing the appropriate method, and maintaining accurate records is crucial to ensuring compliance and maximising your taxable benefits.

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Written by: Christopher Daoud

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Please note that the information provided is of an informative nature, you should not act specifically on the basis of this information alone. Please seek advice of our tax agents for further information.?

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If you have updated your information recently, please let our office know.