How to Benefit from a New Work-at-Home Regimen

Posted on: 26 October 2021

Many Australians have been forced to work from home in recent times, and this may have been a foreign concept. Yet as time has passed, more employers than ever are asking certain employees to continue with this practice, which can directly affect their tax obligations. If you find yourself in this position, how can you maximise your tax advantage, and why do you need to be strategic when it comes to the way that you actually work?

1. Discovering New Deductions

If you've never had to work from home before then, you may not have needed to claim for any work-related expenses and have simply relied on your employer to handle your tax deductions. You may have completed your end of year tax returns without much additional thought and sent everything off to the ATO.

2. The New World

Yet whether you are "forced" to work from home or decide to do so voluntarily, you can adjust your taxes in your favour. For example, you can claim expenses related to this change but will need to be prudent and ensure that you are following the necessary protocols.

3. Segregating the Work Area

Create a designated work area in your home. For example, you should always set aside a specific area in your home for these work-related activities. Granted, this is not always easy in a relatively small household with an active family but wherever possible, dedicate a specific room as your "home office."

If you keep all other activities separate, you can claim for the use of the space against your tax. You need to measure the room and calculate the size against the total footprint of your home. You can then apportion the cost of your monthly utility bills and detect the amount related to your home office space.

4. Making Additional Claims

In addition, don't forget to claim if you need to buy any furniture or other equipment to set up your home office. You can claim some of these expenses in the same year as you incur them, but a larger cost may depreciate. 

5. Ensuring You Get It Right

If you are unsure how to proceed and want to ensure that you are always toeing the line when it comes to the ATO, bring in a tax accountant. They can advise you on how to proceed and also ensure that your end of year tax return is correct.