[Australia] Millions warned not to ‘double dip’ on work-from-home claims

At tax time, Australians have been issued a warning not to double dip on working-from-home claims and to ensure they have detailed records of expenses and do not lodge tax returns too early, ABC News reports.

Nearly nine million Australians claimed about $24.5 billion worth of work-related expenses last financial year (as of March 31) with many relating to working from home.

Taxpayers’ average claim was reportedly about $3,000.

Rob Thomson - Assistant Commissioner - said that more than 5 million Australians claimed working-from-home expenses last financial year, however, some confused the methods they used to make claims in ways that essentially led to double dipping.

Mr Thomson told ABC News that there are two different methods for claiming: the fixed rate method and the actual cost method.

Fixed rate method

The fixed rate method allows people to claim a fixed amount of 67 cents per hour for every hour they work from home and does not require expenses to be apportioned between private and work.

However, it also restricts taxpayers from claiming each expense item separately. It reportedly assumes all expenses were at that rate and encompasses:

• home and mobile internet or data expenses
• mobile and home phone usage expenses
• electricity and gas (energy expenses) for heating, cooling and lighting
• stationery and computer consumables, such as printer ink and paper

Previously, tax agents warned that the 67 cents per hour method could result in a lower tax deduction.

For anyone using a tax agent to lodge their tax return, it's best to ask them the best method to use for work-from-home claims.

"One thing we're focused on this year is making sure that people don't double dip, so they don't claim things like their internet or their phone expenses separately if they're using that fixed rate method," Mr Thomson says.

"The other thing we're focused on is the record keeping.

"People need to keep a record of all the hours they've worked from home for the whole year. Now that can be a time-sheet, that can be a spreadsheet, that can be a diary, whatever the person wants that works for them."

Actual cost method

Under the actual cost method, taxpayers can separately claim each expense they have from working from home but must apportion what is private and what is work-related.

Taxpayers can reportedly claim separately for:

• any decline in value of depreciating assets such as home office furniture (desk, chair) and furnishings, phones and computers, laptops or similar devices
• electricity and gas (energy expenses) for heating, cooling and lighting
• home and mobile phone, data and internet expenses
• stationery and computer consumables, such as printer ink and paper
• cleaning a dedicated home office

"Here we're focused on making sure people have really good records," Mr Thomson said.

"Those records need to have receipts for every type of expense that they're looking to claim — so your phone bill, your electricity bill — but they also need to show how you've apportioned it between any personal use and any work-related use.”

Source: ABC News

(Link and quotes via original reporting)

At tax time, Australians have been issued a warning not to double dip on working-from-home claims and to ensure they have detailed records of expenses and do not lodge tax returns too early, ABC News reports.

Nearly nine million Australians claimed about $24.5 billion worth of work-related expenses last financial year (as of March 31) with many relating to working from home.

Taxpayers’ average claim was reportedly about $3,000.

Rob Thomson - Assistant Commissioner - said that more than 5 million Australians claimed working-from-home expenses last financial year, however, some confused the methods they used to make claims in ways that essentially led to double dipping.

Mr Thomson told ABC News that there are two different methods for claiming: the fixed rate method and the actual cost method.

Fixed rate method

The fixed rate method allows people to claim a fixed amount of 67 cents per hour for every hour they work from home and does not require expenses to be apportioned between private and work.

However, it also restricts taxpayers from claiming each expense item separately. It reportedly assumes all expenses were at that rate and encompasses:

• home and mobile internet or data expenses
• mobile and home phone usage expenses
• electricity and gas (energy expenses) for heating, cooling and lighting
• stationery and computer consumables, such as printer ink and paper

Previously, tax agents warned that the 67 cents per hour method could result in a lower tax deduction.

For anyone using a tax agent to lodge their tax return, it's best to ask them the best method to use for work-from-home claims.

"One thing we're focused on this year is making sure that people don't double dip, so they don't claim things like their internet or their phone expenses separately if they're using that fixed rate method," Mr Thomson says.

"The other thing we're focused on is the record keeping.

"People need to keep a record of all the hours they've worked from home for the whole year. Now that can be a time-sheet, that can be a spreadsheet, that can be a diary, whatever the person wants that works for them."

Actual cost method

Under the actual cost method, taxpayers can separately claim each expense they have from working from home but must apportion what is private and what is work-related.

Taxpayers can reportedly claim separately for:

• any decline in value of depreciating assets such as home office furniture (desk, chair) and furnishings, phones and computers, laptops or similar devices
• electricity and gas (energy expenses) for heating, cooling and lighting
• home and mobile phone, data and internet expenses
• stationery and computer consumables, such as printer ink and paper
• cleaning a dedicated home office

"Here we're focused on making sure people have really good records," Mr Thomson said.

"Those records need to have receipts for every type of expense that they're looking to claim — so your phone bill, your electricity bill — but they also need to show how you've apportioned it between any personal use and any work-related use.”

Source: ABC News

(Link and quotes via original reporting)