Do you work from home? What are you claiming on your tax?
The ATO has announced this year they will be cracking down on ‘stretched’ tax claims such as uniforms, cars and home office expenses. So while you should be sure you are inside the acceptable and honest parameters, you should also be taking all of the advantages available to you as a tax paying citizen.
Tax offsets are there for a legitimate reason so let’s see what little known expenses you can claim when you work from home.
The 3 modes of working from home
Before we jump in though – do you know which category you are in? The three classifications will dictate the types of claims you can make and apply certain limitations and allowances so be sure to know where you fall.
According to the ATO the three types are:
- Home is your principal place of work and you have a dedicated work area that is unlikely to be suitable for domestic use.
- Home is not your principal place of work but you have a dedicated work area – for example a study.
- You work at home but you don’t have a dedicated work area – for example, you use a room with a dual purpose such as a lounge room.
1) Depreciation of equipment, furniture and computers
Yes, you can not only claim the more obvious computer equipment you use for your job or desk or lamp – you can also depreciate these assets to boost your claims. You can do this year on year as well to keep the benefit flowing. These tax deductions can likely keep occuring until the item can be fully written off after it’s ‘effective life’ has been depleted over a few years.
Take stock of all that you use for your home based work – do you have printers, shelves, monitors, chairs, filing cabinets etc? Make sure to claim not only new items but every year remember to depreciate these ageing items as well.
2) Lighting and heating bills
Did you know its not just your phone and internet bills that can be claimed? After determining what portion of the week you are lighting, cooling or heating your home office you can then claim this too.
After all, you need light to work and a comfortable temperature so there is every reason to clain a deduction here – just be sure you correctly parse out any ‘home’ time and don’t run the risk of exaggerating your tax deductions.
3) Low cost items
If you purchase any equipment or items for your home office under 300 dollars you are in luck.
Any work related item under 300 dollars can be instantly written off in full – without having to depreciate the item first. So if you have bought a cheaper end tablet or phone or printer – just write that off immediately.
4) Memberships and subscriptions
While this can apply to those not working from home, it is still something many people overlook when doing their taxes on their home office.
Are you a member of a professional organisation related to your work? Perhaps you are part of a union or work body? You can actually claim your membership fees here.
What about subscriptions? Do you subscribe to work related magazines or websites? Claim that too. Some professions, say journalism or media types may even be able to claim for newspapers and pay TV if it relates to their work.
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