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Home office expenses

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At these troubling times of coronavirus, we understand a majority of people will be working from home and with that imposes the question of which part of these expenses incurred will be claimable deductions?

To claim a deduction for working from home, you must know the following You must have spent the money. The expense must be directly related to earning your income. You must have a record to prove it.

It means that you can not claim a deduction for items given by your employer or if they issue you a reimbursement. If you are not reimbursed but was given an allowance from them to cover your expenses when you work from home, you must include this allowance as income in your tax return and claim a deduction.

If you’ve set up a home office in your study or converted a spare bedroom into a workspace, you need to be aware of the potential tax deductions you can claim when you come to complete your tax return.

You can’t claim a deduction for running expenses if there is no additional cost incurred. For example, if you conduct your work in the living room of your home where other people watch television. That’s why it’s important to have a dedicated office or room of the house if you wish to claim the home office expenses.

Expenses you can claim from working at home: Work-related IT equipment such as a computer, laptop, tablet and mobile phones costs purchased up to $300. (Many workers have laptops or phones provided by their employers while working at home, which cannot be claimed for tax purposes) Home phone and internet bills Mobile phone bills Utility bills such as gas, electricity and water Consumables such as paper, stationery and cleaning materials

You may want to consider getting the help of a tax adviser like The Tax Accountant, fees to which are tax-deductible, to help you calculate depreciation of home office equipment.

Keep in mind that if you use any of the above items for both personal and work-related use, you’ll need to keep records that demonstrate how you estimated the amount of private use and work-related use. You can use the Home office expense calculator to help you work out the amount that you can claim as a tax deduction for these expenses.

Disclaimer: This information is not to be relied upon without speaking to your accountant, tax agent or financial adviser.

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