The Australian Tax Office has made a change regarding tax deductions for working from home. There are now two methods available for claiming a tax deduction for expenses incurred while working from home.
Method 1
The first method is called the "actual method." This involves keeping all invoices and receipts related to running your home and calculating your deduction as a portion of your expenses. To use this method, you must have a part of your house set aside exclusively for work (staff working from your home, seeing clients at your home etc). This method will not be applicable to the majority of GrowthMD health clients.
Method 2 The second method is the new "67 cents per hour method." This method allows you to claim a tax deduction by multiplying the number of hours worked at home by 67 cents. You can use this method to claim expenses such as energy, internet, phone, stationery, and computer consumables. Unlike the actual method, you don't need to have a specific part of your house set aside for work to use this method, and more than one person in your house can use it.
Record-Keeping Requirements – Method 2 To use the new 67 cents per hour method, you must keep actual records of the hours you work at home from 1 March 2023. Looking ahead to the 2023 income tax return claim, this means keeping a daily record of the hours worked from 1 March 2023 to 30 June 2023.
We suggest keeping a diary note (or a worksheet record) of the number of hours you worked each day. Additionally, you must keep at least one monthly or quarterly bill to show that you incur expenses (such as internet and electricity bills).
If you have any questions about claiming a tax deduction for working from home, please reach out to your GrowthMD accountant. We are here to help you keep the required documents for this change and ensure that you receive the maximum tax deduction available.