Have you been working from home these last few months due to COVID-19? If so, the ATO has introduced a temporary shortcut method to help you easily calculate these home office expenses you may be able to claim with minimal record keeping requirements. This article will unpack how to navigate the shortcut method.
The Shortcut Method
The shortcut method has been introduced by the ATO this year to simplify how you calculate your deductions for working from home. It is important to note that this method is only temporarily available for the period 1 March to 30 June 2020. If you worked from home during this period, then you can use this method.
How to Claim Home Office Expenses Using it
Using the shortcut method, you are able to claim 80 cents per hour for every hour you worked from home between the 1 March and the 30 June 2020.
This rate should be used if you are working from home to fulfill your employment duties (not simply carrying out minimal tasks like checking emails or taking calls) or if you have incurred additional running expenses as a direct result of working from home.
All your work from home expenses such as: phone expenses, electricity and gas for heating, cooling and lighting, internet expenses, and the decline in value of equipment and furniture are covered under the shortcut method.
If you use this method, keep in mind that you can’t claim any other expenses for working from home.
It is not essential that you have a dedicated work area to use this method, though, it is essential to keep a record of the hours you have worked from home in the form of a timesheet, roster or diary (or equivalent).
The shortcut method has been introduced to make it simpler for Australian’s that have had to work from home recently to claim home office expenses as part of their tax return. Though, you don’t have to use the shortcut method, you can continue to use other existing methods to calculate your deductions. You are still able to use the method that will give you the best outcome provided you meet the working criteria and have met the record keeping requirements.
For those who had a work from home arrangement before 1 March 2020, it is required that you use one of the existing methods to calculate your deductions for the period 1 July 2019 to 29 February 2020.
Important reminder: This shortcut method includes the decline in value of all items. If you choose the shortcut method you are not required to separately calculate the decline in value of equipment or depreciating assets. However, in case you combine methods or use different methods in later years it is recommended to keep the purchase receipts for depreciating assets or equipment you use whilst working from home as well as records of how you calculated your work – related use of the asset and depreciation calculations.
Visit this link to learn more about the shortcut method for employees working from home during COVID-19.
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