As part of its COVID-19 economic response, the ATO has recently released a new simplified (optional) short cut method to claim deductions for additional running expenses incurred by employees and business owners who are genuinely carrying out employment duties or running their business from home, during the period from 1 March 2020 to 30 June 2020 due to Covid-19.
Under the ATO's new temporary shortcut method, the ATO will allow individuals in these situations 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. The hourly rate covers all additional running expenses, namely:
Importantly, there is no requirement to have a separate or dedicated area at home set aside for working (e.g., a private study), for the purposes of using the 80 cents per hour method.
The 80 cents per hour method is an optional and alternative method to claiming additional running expenses under the existing claim methods (refer below) and will only require minimal records to be kept (i.e., a record of the number of hours worked from home during this period).
Note that individuals still have the option of claiming their additional running expenses using the following existing claim methods, even during the period 1 March 2020 to 30 June 2020:
Generally, expenses associated with a taxpayer's home are private in nature and do not qualify for a deduction. However, where part of a taxpayer's home is used for genuine work related activities or for business purposes, the deductions may be available for the following two categories of expenses:
A deduction can only be claimed by a taxpayer in these circumstances for expenses associated with their home, where the relevant expense:
If you would like any further information or assistance in regards to Home Office Expenses, please feel free to contact us on 1300 885 761 .
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