Calculate home office expenses to save taxes and ear more money
tax return accountant victoria
Intorduction
If you are an employee who works from home, you could be allowed to claim a deduction for work-related costs. Tax return accountant Victoria, suggests to claim your working from home expenditures, you must work from home to fulfill your employment duties, rather than merely performing minor activities such as checking emails or receiving phone calls, which incurs significant costs.
Home Office Running Expenses
When you work from home an occasion, you can deduct your home office operating expenditurer. If you work from home regularly, you will use the occupancy expenses option.
These are the general operating costs of a home office, and they include:
The Price of renting a room (power costs for heating, cooling, and lighting)
Phone expenses for business
The depreciation of IT equipment (computer, printer, scanner, etc.)
The depreciation of furniture and furnishings (tables, chairs, curtains/blinds, floor coverings, light fixtures, and so on)
The expense of repairing furniture and furnishing utilized for your job, as well as the cost of cleaning.
It excludes work-form-home expenses such as:
Cell phone
Internet access at home
Phone at home
Depreciation of personal computers
Office supplies
Stationery
All of these products must be claimed separately on your tax return.
Expenses one cannot claim
Employees cannot generally deduct living expenditures such as rent, mortgage interest, etc. Employees who work from home cannot claim the following expenses:
For coffee, tea , milk, and other typical home things that your employer could have normally provided you with at work.
Concerning clidren and their education, this involves preparing them for online learning, teaching them at home, and purchasing equipment such as iPads and tablets.
Expense that you are reimbursed for, that your company pays directly for, or that the worth of products provided by your employers - sucha s a laptop or a phone - has declined.
Methods to calculate home office expenses
To claim a deduction for expenses incurred while working from home, you need to keep records that prove you incurred that costs and use any of the following techiques.
Fixed-rate method:
If you fulfill the qualifying and record-keeping criteria, you can calculate your deduction for working form home costs using the fixed-rate approach. To use the fixed-rate technique, you must do the following:
Have a designated work location, such as a home office, where you may work when you are at home.
Keeping records that'llbe demonstrating the portion of work-related expenses not covered by the fixed-rate per hour.
Keeping records of the number of hours worked at home throughout the fiscal year.
You are entitled to a set rate of 52 cents per hour working form home. The rate covers any additional operating expenditures you incur, such as:
The depreciation of home office furniture and furnishings, such as a desk.
For heating, cooling, and lighting, electiricity and gas are used.
Cleaning your home office, etc.
If you work from home, you can also claim the job-related portion of the following expenses that are not covered by the 52 cents per hour rate:
Phone, data, and internet charges, including handset depreciation
Computer consumables and stationery
Actual cost method:
If you fulfill the qualifying and record-keeping requirements, you can utilize the actual cost method to claim a deduction for the real expenses you incur as a result of working from home. To use the real cost method, you must:
Incur increased operating expenses as a result of working from home.
Keep documents, such as receipts or other written documentation.
When working from home, you calculate your deduction by estimating the real expenses you incur to earn your revenue. This could involve the following costs:
Depreciating goods, such as home office furniture and furnishings, phones and computers, laptops, or similar equipment.
Cleaning costs, if you work in a designated area.
Electricity and gas are used for heating, cooling, and lighting.
Internet and phone
Consumables and stationery for computers, such as printer ink.
If you do not have a separate workplace, such as a home office, you will normally spend just minor additional operating costs.
Shortcut method:
This approach is only available for calculating your deductible for work from home expenditures. You must meet the eligibility and record-keeping requirements for this method as well. This strategy is appropriate if you:
Worked from home and incurred some additional operating expenditures
Keep track of how many hours you worked from home.
The temporary shortcut approach makes calculating your deductible for working from home expenses easier. You can use this method to claim 80 cents an hour for every hour worked from home. The shortcut technique covers all of your expenses associated with working from home, such as:
Telephone charges
Internet charges
The depreciation of equipment and furniture
For heating, cooling, and lighting, electricity and gas are used.
The shortcut technique entails a decrease in the value of all objects. There is no need to compute the loss in value of equipment independently if you utilize this method.
You can choose the way that best matches your needs, among the methods mentioned above.
Final Thoughts:
According to tax return accountant Victoria, tax filing for 2021-2022 will be considerably different from prior years. While certain expenses would not have been incurred and hence cannot be claimed, the ATO anticipates an increase in home office expenditure claims. As a result, it is critical to keep reliable records and make evidence-based logical computations to support the amounts included in the tax return.