To simplify the process of claiming home office expenses amid the COVID-19 pandemic, the ATO introduced a shortcut method under which taxpayers can choose to claim a fixed rate of $0.80 per hour for all their running expenses for the 2020–21 financial year
However, clients claiming the home running expenses need to be cautioned that to utilise the shortcut method, both business owners and employees working from home need to keep a diligent log.
Taxpayers must maintain a logbook of the actual hours worked from home or a diary for a representative four-week period. This amount of use can then be applied over the entire year to determine the full claim.
According to the ATO, taxpayers are able to choose from three methods to calculate their additional running expenses for the allocated period. These include:
The ATO is also reminding people that the three golden rules for deductions still apply. Taxpayers must have spent the money themselves and not have been reimbursed, the claim must be directly related to earning income, and there must be a record to substantiate the claim.
Taxpayers can claim a deduction for the additional expenses they incur under the fixed rate and actual cost methods. These include: