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While we are all dealing with this crazy virus, there might be an opportunity to claim some expenses as a result of it.

No it’s not the additional time that some people may have spent on a cruise ship, as that would be personal expenses, but rather the need that might arise for people to work from home.

Should your employer instruct you to work from home as a result of the virus, you can claim home expenses.

The additional costs of running expenses like electricity for heating, cooling and lighting are deductible, but you need to be able to demonstrate that there were additional costs.

If working from home means sitting in front of the TV or at the kitchen bench doing some emails, it’s unlikely that you are incurring any additional expenses. However, if you have a separate work area, then you can claim the work-related portion of running expenses for that space.

There are three golden rules for taxpayers to follow to get working from home claims right.

  • You must have spent the money yourself and not been reimbursed by your employer.
  • The claim must be directly related to earning your income.
  • You need a record to prove it.

Employees cannot generally claim occupancy-related expenses like rent, mortgage repayments, property insurance, land taxes and rates.

Examples of expenses you can claim:

  • Decline in value of equipment,furniture and furnishings in the area you use for work
  • Cleaning
  • Lighting
  • Heating and cooling
  • Computer consumables and stationery
  • Work related percentage of phone and internet

 

There are two ways to make a claim for home expenses:

  • Calculate the actual expenses  as most of this article is describing OR
  • You can claim a fixed rate of 52 cents per hour worked. If you have a dedicated work area then this would be a much easier method to use.

 

So at least there will be some tax benefit to working from home besides being able to work in your pyjamas.

We are not experts in the Coronavirus but we are expert tax accountants  so we can help you maximize your with the tax deductions. We can be contacted via email at questions@accoladeaccounting.com.au

This article was published on Flying Solo micro business community on 25 March 2020.

 

Please see our more recent BLOG about a temporary method to claim hone expenses.