Working from home has quickly become the new norm and, as a result, the way we work is rapidly changing. As more people continue to work from home, new information and ideas are being explored, and priorities are changing. The pandemic has seen the rise in popularity of the home office and having office equipment on hand in the comfort of your own home. However, such items come at a cost – so what costs are claimable?
Here are some of the expenses you could be eligible to claim on tax as a result of remote work in your home.
But first, what are the rules for expense claims when you work from home?
If you work from home and your house contains a designated space within it for work activities, you may be able to claim on both occupancy and running expenses. However, if you work or carry business elsewhere (e.g. an office) but do work at home occasionally, you cannot claim occupancy expenses even if you have a designated workspace within your home.
You may be able to claim expenses such as rent, mortgage interest, rates, insurance premium and land taxes. However, this is only in limited circumstances, so you need to speak with a professional to understand if you are eligible for such claims.
Utility costs, such as electricity, heating, cooling and lighting
Working from home means that your electrical bill is likely to be much higher than it usually would! After all, you are home for longer periods and running lights, computers, and printers to work, all while either heating or cooling your home. These costs quickly add up, and that’s why you can claim a proportion of the various household utility bills related to working from home. Please note that you are unable to claim for periods where the home office space and utilities are being used for other purposes, nor the portion of bills relating to other parts of your home.
Home office equipment, including computers, printers and phones
You can claim the full cost (for items costing up to $300) or the decline in value (for items costing $300 or more). If you’re self-employed, you may be able to immediately write off equipment irrespective of the cost.
Work-related phone calls
If you can show that you are on a call or have to phone your staff, employers, customers or clients regularly while you are away from your workplace, you may be able to claim a portion of such calls on your phone bills.
Depreciation of office furniture, fittings, equipment and computers
Upon creating your in-home ‘office’ space, if you purchase and invest in furniture, and fittings (such as shelving, desks and cupboards), you can claim a deduction for the decline in value of such items to the extent that it relates to your work activity, likely leading to a write-off of the initial cost over a period of time.
Similarly, this also applies to equipment and technology such as computers, laptops, mobile phones, printers and other work-related items.
While you’re reviewing your claimable WFH expenses, why not explore our website, and consider reviewing your current strata manager too! We’re a leader in strata management and are here to help foster a harmonious and well-run community for all residents. Contact More Than Strata today.