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Working from home deduction changes for 2022-23

On February 16th 2023, the ATO announced changes to the record keeping requirements and methods for calculating working from home deductions. From the 2022–23 income year, The actual cost method remains the same, but the revised fixed rate method has been updated to better suit modern working from home situations. This change simplifies the process of calculating expenses and eliminates the need for time-consuming apportionment calculations.

What are the key changes in revised fixed rate method?

  1. The rate per work hour has increased from 52 cents to 67 cents.
  2. . The revised fixed rate method doesn’t require taxpayers to have a dedicated home office space to claim working from home expenses.
  3. Taxpayers need to keep a record of all the hours worked from home for the entire income year – the ATO won’t accept estimates, or a 4-week representative diary or similar document under this method from 1 March 2023.

What are the expenses covered by the rate $0.67?

This rate per hour covers expenses incurred for:
  • Energy (electricity and gas),
  • Data and internet
  • Mobile and home phone usage
  • Computer consumables (printer ink)
  • Stationery
No additional deduction for any expenses covered by the rate can be claimed.

What are the expenses can be claimed separately?

  • The decline in value of assets used while working from home, such as computers and office furniture.
  • The repairs and maintenance of these assets.
  • The costs associated with cleaning a dedicated home office.

What records do I need to claim work from home expenses?

  • Taxpayers need to keep a record of all the hours worked from home for the entire income year
  • Records of hours worked from home can be in any form provided they are kept as they occur, for example, timesheets, rosters, logs of time spent accessing employer or business systems, or a diary for the full year.
  • Records must be kept for each expense taxpayers have incurred which is covered by the fixed rate per hour (for example, if taxpayers use their phone and electricity when working from home, they must keep one bill for each of these expenses).

Summary

  1. What is the revised fixed rate method?
You can claim the fixed rate of 67 cents for each hour you worked from home
  1. What expenses I can claim separately?
You can claim a separate deduction for decline in value of assets and other working expenses you incur.
  1. What expenses I can’t claim separately?
You can’t claim a separate deduction for any expenses included in the revised fixed rate method
  1. What records do I need to keep?
you will need records of all the hours you worked and evidence you paid for the expenses. If you are still unclear about the changes to the revised fixed rate method for working from home deductions or are concerned about the implications of the new rules, we at TASC are here to help. Our team of experts can provide you with the guidance and support you need to fully understand the changes and ensure that you are in compliance with the latest regulations. With our assistance, you can navigate the new rules with confidence and peace of mind. Contact us today to learn more about how we can help.

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