“
include the following expenses which you will need to calculate separately: • Phone and internet • Consumables and deprecation of equipment l Actual costs method – As the name suggests you keep a record of the actual costs incurred to work or operate your business from home.
I’m only working from home due to COVID-19
To support taxpayers in this situation the ATO has introduced a shortcut method which provides a simple way to calculate these expenses with minimal recordkeeping requirements. This shortcut method applies from 1 March 2020 and can be applied up to 30 June 2021. Using the shortcut method, you can claim a deduction of 80 cents for each hour you worked from home for the period between: l 1 March 2020 to 30 June 2020 in your 2019–20 tax return l 1 July 2020 to 30 June 2021 in your 2020–21 tax return. If you: l Were working from home to fulfill your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls l Incurred additional running expenses as a result of working from home. The shortcut method doesn’t require you to have a dedicated work area and covers all additional deductible running expenses.
What are my record-keeping requirements when working from home?
You will need to keep appropriate records to substantiate your claims for all your running and occupancy expenses. This will depend on the www.selfstorage.org.au
PHOTO BY MICHAEL SOLEDAD ON UNSPLASH
You will need to keep appropriate records to substantiate your claims for all your running and occupancy expenses.
method you use to claim your expenses, written evidence may include: l Written diary including hours usage or explain floor space allocation and measurements l Rental contract between homeowner and business (occupancy expenses) l Mortgage interest, rent, insurance and council rates (occupancy expenses) l Receipts for purchase and repairs of office equipment and invoices for utility bills.
When I sell my home do I have to pay CGT if I claim home office expenses?
CGT generally will not apply when you sell your home. However, if you used any part of your home for business purposes, you may have to pay CGT. You will generally only have to pay CGT for periods when you used your home for your business. For example, if you owned your home for 10 years but only used it for business for 3 years then you
will only need to calculate capital gains tax for the 3-year period. The amount of taxable capital gain will usually be calculated using the same proportional method you used to calculate your deduction for occupancy expenses. CGT won’t be payable if any of the following apply: l You only claimed running expenses as an employee l You operated a business from home, but you didn’t have a dedicated area set aside l Your business was operated through a company or trust. In addition to this, you may be able to apply one or more of the small business CGT concessions to reduce your taxable capital gain. l If you have any questions in regard to claiming home office-related expenses, please call Bishop Collins on 02 4353 2333
JUNE / JULY 2021 INSIDER 119
