In the wake of pandemic, many Australians were asked to work from the comfort of their home to track down the infected people. To compensate for all the arrangements an individual made to make their work from home as good as working from office, ATO introduced Working from Home Deductions that you can claim.

For income year 2022-23, the tax office changed the record keeping requirements and methods for calculating working from home deductions. The methods available to calculate working from home deductions are:

• Revised fixed rate method
• Actual cost method

The revised fixed rate technique has been updated to better represent modern working from home arrangements, making it simpler to compute expenses and avoiding time-consuming apportionment computations. The actual cost approach has not changed.

As per the changes, the new revised fixed rate method includes:

• Work from home hours increased from 52 cents to 67 cents per hour
• Removes the requirement to have a dedicate home office space
• Works out the claim for
• electricity and gas
• phone and internet usage
• computer consumables
• stationery
• Permits taxpayers to separately deduct the part of depreciating assets, like as office equipment and technology that is connected to their employment.

Businesses that conduct all or part of their operations from home may also deduct home-based business expenses using the updated fixed rate approach.

If your client plans to use the revised fixed rate method for their 2022–23 tax return, they need to have:

• a complete record that completely represents the hours they worked from home, starting from 1 July 2022 to 28 February 2023.

• a record of the total number of hours they worked from home as well as the evidence showing that they paid for each of the expenses they incurred that are covered by the fixed rate method, right from 1 March 2023 to 30 June 2023.

Also, they will need records for any furniture or technological devices they purchased in order to work from home. For more details about work from home deductions, feel free to contact our tax accountants at KPG Taxation.