ATO announces changes to working from home deductions

The ATO has advised (QC 71361) that they have changed the way that taxpayers claim working from home deductions. We are bringing these changes to your attention so that you can keep the appropriate records and still claim WFH expenses in your 2023 tax return.

Key Changes from 1 July 2022

Taxpayers can claim deductions based on their actual expenses or adopt a fixed rate method of 67 cents per hour if proper records of relevant expenses have been kept and maintained.
A separate home office or dedicated works area in your home is not required to rely on the fixed rate method. Additionally, each individual working from home can apply the fixed rate method if eligible.

Records You Are Required to Keep

You need to keep the following records for the 2023 and later financial years:

  • A record representative the total number of hours worked from home between 1 July 2022 and 28 February 2023
  • A record of the total number of hours worked from home from home since 1 March 2023. A four-week representative diary or an estimate based on the entire income year or for a particular period will not be accepted by the ATO.


Next steps

To use the revised fixed rate method and claim 67 cents per hour for working from home expenses in your upcoming 2023 Tax Return, you must IMMEDIATELY start recording your actual hours working from home.

A record of your hours for the income year can be in the form of:

  • Timesheets
  • Rosters
  • A diary or similar document kept contemporaneously.

A record must be kept for each additional running expenses incurred. Any documents relied on should demonstrate that you have incurred additional running expenses, what the expense is and that you incurred it.

  • For energy, mobile or home telephone and internet expenses, you must keep one monthly or quarterly bill. If the bill is not in your name, you should also keep additional evidence showing you incurred the expenses (such as a shared credit card statement showing payment or a lease agreement showing you share the property, and therefore the expenses, with others)
  • For stationery and computer consumables, which are occasional expenses, you must keep one receipt for each item purchased.

Accounting Edge is here to help you minimise your tax deductions, so please do not hesitate to get in touch if you need assistance with your returns

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