Home Office Expense

With more people working from home, understanding how to claim home office expenses has become crucial. The Australian Taxation Office (ATO) provides several methods for claiming these deductions, and choosing the right one can significantly impact your tax return.

Methods for Claiming Home Office Expenses

1. Fixed Rate Method (67 cents per hour)

From 1 March 2023, you can claim 67 cents for each hour you work from home. This rate covers:

• Electricity and gas for heating, cooling and lighting
• Internet and phone usage
• Stationery and computer consumables

2. Actual Cost Method

You can claim the actual expenses you incur from working at home, including:

• Decline in value of depreciating assets (computer, desk, chair)
• Electricity and gas costs
• Home office cleaning costs
• Internet and phone bills
• Stationery and office supplies

Record Keeping Requirements

Regardless of which method you choose, maintaining proper records is essential:

• Keep a diary or timesheet of hours worked from home
• Retain receipts for all expenses claimed
• For the actual cost method, keep detailed records of your expenses and calculations

Important Considerations

Remember that you can only claim expenses that relate directly to earning your income. Personal expenses or the cost of travelling between home and work are generally not deductible.

If you're unsure which method is best for your situation, our team at TT Accountancy can help you maximize your legitimate deductions while ensuring compliance with ATO requirements.