Tax claims for working at home streamlined

In response to concerns brought by the COVID-19 pandemic, Australian Taxation Office (ATO) has announced the introduction of special arrangements this year to make it easier for people to claim deductions for working from home.

The new arrangement will allow people to claim a rate of 80 cents per hour for all their running expenses instead of calculating costs on certain running expenses. This new rate is also made available for other people in the same house who are also working from home.

In addition, the requirement to have a dedicated work from home area has also been removed as well. 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.”

The new arrangement is not meant to prohibit people from making working from home claim under existing arrangements in which one calculates all or part of their running expenses. However, claims for working from home expenses prior to 1 March 2020 have to be made using the existing arrangements instead of the recently-announced shortcut method.

The ATO will review the special arrangement for the next financial year as the COVID-19 situation progresses.

The ATO has also reminded the public that the three golden rules for deductions still apply. Taxpayers must have spent the money themselves and not have been reimbursed, the claim must be directly related to earning income, and there must be a record to substantiate the claim.

Additional information on this special measure and other relevant information can be found on the ATO website ato.gov.au.

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