2022–23 Working From Home Deductions: What’s Changed?

The Australian Taxation Office has just released its revised methods for working-from-home deductions for the 2022–23 tax year. The main change this year is that the ATO is now more focused on making sure people are actually working from home, and not just claiming the deduction without any evidence to back it up. So if you’re planning on making a claim for working from home this year, make sure you follow these new guidelines to avoid being caught out!

From the 2022–23 income year, the methods available to calculate working-from-home deductions are the:

• revised fixed rate method
• actual cost method.

While the actual cost method remains unchanged, the revised fixed rate method has been updated to better reflect contemporary working-from-home arrangements, making it easier to calculate expenses and avoid time-consuming apportionment calculations.

The revised fixed rate method:

• has increased from 52 cents to 67 cents per hour worked from home
• removes the requirement to have a dedicated home office space
• works out the claim for
• electricity and gas
• phone and internet usage
• computer consumables
• stationery
• allows taxpayers to separately claim the work-related portion of the decline in value of depreciating assets – such as office furniture and technology.

The revised fixed rate method can also be used by businesses that operate some or all of their business from home to claim home-based business expenses.

If you plan to use the revised fixed rate method for your 2022–23 tax return, you need to have:

• from 1 July 2022 to 28 February 2023 – a record which is representative of the hours you worked from home. (e.g. diary notations or a work record showing start and finish times for at least 1 month of work as a representative period of time for the year)

• from 1 March 2023 to 30 June 2023 – a record of the total number of hours you worked from home (such as a timesheet, roster or diary) as well as evidence you paid for each of the expenses you incurred that are covered by the fixed rate method (for example, a phone or electricity bill). You will also need records for any equipment you bought to work from home, like technology or furniture (which provides details of the supplier, cost, date acquired).

  So this will mean that, for EVERY HOUR you want to claim work-from-home deductions using this method, you MUST have the time documented. While this may not be needed for your employer, it is necessary in order to be able to make a full and legitimate tax deduction at year-end.Your diary – paper or electronic – will become your best friend this year!

  There are many apps that can be used for this, or even just a consistent notation on your diary of your start and finish times, recorded daily. But recorded it must be!

Working from home is becoming more common, so make sure you know what you can and can’t claim in order to get the best return on your investment. Contact Fiscal Artisans today for expert advice on how to maximise your deductions this financial year!