Claiming tax deductions has just become a lot easier for Australians working from home as a result of COVID-19.

Due to the influx of Australians working from home, the ATO have introduced a new, simpler method of claiming tax deductions. The new flat-rate method will allow those working from home to claim 80 cents per hour for all their running expenses.

Taxpayers opting to use the shortcut method are required to record the hours they’ve worked from home in the form of a timesheet. Claiming tax deductions with the new method is optional, taxpayers can choose to use the old method. Under the old method taxpayers can claim back 52 cents per work hour on the work-related portion of specific items.

The change is effective from March 1 to June 30, after which the ATO will evaluate the COVID-19 situation and arrangement for the next financial year.

What can you claim?

If you’ve been working from home you will be entitled to claim a flat rate of tax back from a combination of work-related expenses from March 1. There is an exclusion of general household items such as coffee or milk and occupancy expenses which include mortgages or rental payments. Additionally, if you’ve driven to your office, you’re able claim back 66 cents per km.

Which method is better for me?

Opting for the newer, simpler method might mean you receive less of a tax deduction. It is important to consider that the new flat-rate method groups all expenses together. If you have significant expenses or have made a larger purchase it might be better to use the original claim method. For more information visit: www.ato.gov.au/General/COVID-19/Support-for-individuals-and-employees/Employees-working-from-home/

The above information is a brief summary only and does not take into account your personal needs and is not a substitute for independent professional advice. We strongly recommend that you speak to your accountant as they will be able to provide you the most suitable advice for your individual circumstance and to ensure that you are also always receiving the most up to date information.