For an estimated five million Australians, the way they can claim major tax breaks will soon change.
The Australian Taxation Office has announced it has refreshed the way people can claim work-related deductions later this year.
Prior to the pandemic, people who worked from home, but in a dedicated office space, could claim 52 cents for every hour worked.
When Australia went into lockdown, the tax office introduced a shortcut method where taxpayers working from home could claim 80 cents for each hour.
The ATO did not require workers to have a home office, nor were they required to keep an ongoing diary or calculations of their expenses.
But from July 1, the shortcut method will no longer be available.
Under the new system, taxpayers who work from home can claim 67 cents per hour. The rate includes phone and internet expenses, as well as electricity use and stationary.
Taxpayers who were claiming work from home deductions by using the “actual cost” method will experience no changes.
Assistant Commissioner Tim Loh said it was critical those working from home kept a record.
“This will give you more flexibility to choose the method that gives you the best deduction at tax time depending on your circumstances,” he said.
CPA Australia Senior manager tax policy Elinor Kasapidis warned that records must be kept daily from March 1.
“A four-week diary representative of the year isn’t going to cut it. They also need to keep some records about their expenses incurred while working from home, such as copies of utility bills,” she said.
Pre-pandemic, around two million Australians claimed working from home deductions.
CPA Australia says this figure has jumped to about five million in the last three years.
Mr Loh stressed it was important that people checked they were eligible for the deductions before claiming them.
“To claim your working from home expenses, you must be working from home to fulfil your employment duties, not just carrying out minimal tasks, such as occasionally checking emails or taking calls,” he said.
“Also, you must incur additional expenses as a result of working from home.”