The Australian Taxation Office (“ATO”) has announced in athat business owners and employees who are now working from home because of the COVID-19 outbreak, will have access to a simplified way for claiming tax deductions, under a new “working from home shortcut”.
Under the new arrangements (which are optional), taxpayers can claim a rate of 80 cents per hour for all their running expenses, rather than needing to calculate costs for specific running expenses.
Also, multiple people living in the same house can now claim this new rate. In addition, the requirement to have a “dedicated work from home area” have also been removed. The new arrangements will also require the taxpayer to keep a record of the number of hours worked from home as evidence when making a claim.
Theindicates taxpayers making claims for working from home expenses prior to 1 March 2020 “should be calculated using the existing approaches and are subject to the existing requirements”.
Currently, under the, individuals can claim a rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture. They are also able to make a claim for the work-related portion of their phone and internet expenses, computer consumables, stationery, and the depreciation in value of a computer, laptop or similar device.
ATO Assistant Commissioner Karen Foat, said the new “shortcut method” will make it easier for those who are working from home for the first time:
According to the, there are three ways that you can choose to calculate your additional expenses for the 1 March 2020–30 June 2020 period:
Ms Foat said that if the Federal Government announces a prolonged lockdown extending into the next financial year, the ATO is likely to extend the new claiming method:
Paul Meissner,Director and Accountant told ABC News while he applauded the ATO's efforts at simplifying claims, taxpayers should still look at all their claim options to avoid paying more tax than they have to. Mr Meissner said for people paying $80 to $100 per month for home internet plus their phone and looking to claim any extra items such as printer or scanner, "using the shortcut could leave them worse off":
from H&R Block also told ABC News:
Mr Chapman also acknowledged the ATO's flat rate allowance was "easy to use, and some taxpayers may opt for simplicity over a bigger deduction".
, Tax Partner at KPMG said to ABC News that the ATO shortcut approach was "pragmatic", commenting:
Ms Lock said the question taxpayers needed to answer is, “how much time do you have and how good at record keeping are you”, she commented further “… If the answer is not a lot and not great [at record keeping], the ATO shortcut method sounds like a good option.”
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