ATO ANNOUNCED TODAY
Simplified Home Office Claims for Individuals
Today the Australian Taxation Office (‘ATO’) has announced a temporary short cut method for individual taxpayers to claim deductions for additional running expenses incurred as a result of working from home due to the Coronavirus pandemic.
The ATO will allow individuals to claim a deduction for all running expenses incurred during the period 1 March 2020 to 30 June 2020, based on a rate of 80 cents for each hour an individual carries out genuine work duties from home. The 80 cents per hour method is designed to cover all deductible running expenses associated with working from home and incurred from 1 March 2020 to 30 June 2020, including:
This means that, under the 80 cents per hour method, separate claims cannot be made for any of the above running expenses (including depreciation of work-related furniture and equipment). As a result, using the 80 cents per hour method could result in a claim for running expenses being lower than a claim under existing arrangements (including the existing 52 cents per hour method for certain running expenses).
Furthermore, according to the ATO’s announcement, under the 80 cents per hour method:
Working from home running expenses that are incurred before 1 March 2020 (and/or incurred from this date where an individual does not use the 80 cents per hour method) must be claimed using existing claim arrangements. Broadly, these existing claim arrangements require: