Since most of us have some sort of working-from-home arrangement currently in place, in an effort to slow the spread of COVID-19, the Australian Tax Office has announced a major change.
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The Tax Office (ATO) has just revealed new WFH expense rules that affect anyone working from home due to the coronavirus crisis. These new rules allow Australians to claim a rate of 80 cents per hour for all their running expenses. This will be instead of calculating costs for specific running expenses, as taxpayers normally would do.
This new arrangement was announced today by the Minister for Housing and Assistant Treasurer, Michael Sukkar, and is aimed to make the act of claiming tax easier for people in these unprecedented times.
It should be noted that multiple people living in the same house can claim this new rate individually and it is no longer a requirement to have a dedicated work-from-home space in order to claim from the ATO.
This temporary arrangement will be in place from March 1 to June 30, anything before this date bracket must use the pre-existing working from home approach. As for after this date, the ATO will review this arrangement for the next financial year as the COVID-19 situation progresses.
Assistant Commissioner of the Australian Tax Office, Karen Foat, addressed the matter today, saying:
“The shortcut method provides a rate of 80 cents per hour and will only require you to keep a record of the number of hours worked from home… This recognises that many taxpayers are working from home for the first time and makes claiming a deduction much easier… If you choose to use this shortcut method, all you need to do is keep a record of the hours you worked from home as evidence of your claim.”
As mentioned by Karen Foat, Australian taxpayers will have to choose to use this arrangement. Taxpayers have one of three choices: You can claim the rate of 80 cents per work hour for all additional running expenses, or claim the actual work-related portion of all your running expenses (which taxpayers would need to calculate on a reasonable basis), or you can claim a rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture, plus the decline in value of office furniture and laptop device.
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