Australians claiming deductions for home office expenses may continue to use the ‘shortcut’ method until December 31, after the ATO extended the period for making claims. The extension is aimed at providing additional tax relief for people working from home during the Covid-19 pandemic period.
The shortcut method covers a variety of work-from-home expenses such as electric, internet, phone expenses, and depreciation of assets. Claims using other methods, such as the actual cost and fixed rate method, can still be made at the rate of 52 cents per hour and can continue to be made under existing arrangements.
As announced by the ATO in April, 80 cents per hour can be claimed by the newly extended shortcut method. This form of tax deduction can partly alleviate the hardship that many around the country have felt, after heavy restrictions and prolonged periods of lockdown as Australia attempted to get the pandemic under control within its borders.
Individuals using the shortcut method on their taxes do not need to have their own private area at home to work in order to make claims; multiple people living in the same home can make separate claims.
People making deductions should keep in mind that working from home from 1 March to 30 June 2020 counts toward the 2019-2020 income year, while the 1 July to 31 December period counts toward the 2020-2021 year. It is important to keep receipts because there may be a combined or different method in later years.