Great News! Well, it could be…
The ATO have extended their 80c Shortcut method to 30 June 2021.
This means that if you have worked from home for the full year, you may be able to claim the 80c Shortcut Method for the full year.
What is the 80c Shortcut Method?
This method covers ALL expenses relating to you working from home. So, all running expenses (Heating, Lighting, Cooling & Depreciation of Office furniture), your phone, internet, office consumables and office tools expenses.
What Are the Perks?
- You don’t need to work from a designated office, so you can be working from your kitchen table and still claim the tax deduction.
- You need a one-month log or your timesheets to prove the hours spent working from home.
- You don’t need to worry about the usual recordkeeping hassles.
- It’s easy.
However, hassle free aside, the 80c Method may not be the best tax deduction for you.
Let’s look at the Normal Home Office Method
First of all, the normal home office method allows you to claim your home office running costs at 52c per hour.
It’s also important to note that you must work from a designated office. So, if that’s something you can do easily, then we’re on the right track.
Next step, you need to have a one-month logbook or diary tracking your hours.
Tax Tip: At the end of the financial year, add up your hours from your logbook and multiply them by the number of months you worked.
140 hours x 11 months = 1540 hours
Include your total hours in the Home Office section of your Online Income Tax Return
Now… This is where the ‘Normal’ way can be SO. MUCH. BETTER!!
As mentioned earlier, the 80c Shortcut Method covers all your WFH costs at a single rate of 80c per hour. But the Normal method doesn’t – which is a good thing!
In addition to the normal home office running costs, you can also claim everything else related to working from home.
This could be things like:
- Computer Equipment (Laptops, Headphones, Printers, Computers, Monitors etc.) and/or
- Computer consumables (stationery, paper, printer ink etc.)
To claim additional expenses related to working from home you must keep the correct tax records:
Keep a one-month logbook tracking your private and work calls or texts
Keep a one-month logbook tracking your private and work use (this includes your families use)
Keep receipts or invoices for any other expenses.
What’s the point? Is it really going to make that much of a difference?
It is going to make a huge difference – we will show you how putting in a bit of effort can make an almost $800 difference to your income tax return…
You have been working from home in a designated office for the past year. You are tax smart and have kept a one-month logbook tracking your hours. Over the year you have worked a total of 1404 hours.
You also kept a logbook for one month for phone and internet, tracking your work-related calls and internet use (total $336).
And finally, you kept receipts for expenses such as Printer and Printer Cartridges which were 100% for work use (total $800).
80c Method tax deduction would be - $1,123
Normal home office method would be - $1,866
Difference + $743
Put in a little bit of effort with your recordkeeping, and you can give your tax refund a very healthy boost.
Need a logbook?
Jump on over to Gotax, inside each specific expense section you’ll find handy-dandy logbooks.
Keep your receipts!
Never ever miss a tax deduction again! Use our app, Deduction Grabber to take photos of your receipts and record your expenses. It’s free to download from your preferred app store.
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