The BIG change coming to your tax return if you work from home and not everyone will like it


Why Aussies who work from home are going to have a VERY painful time doing their tax returns: ‘Be much more prepared’

  • Those working from home losing a shortcut when submitting in their tax return
  • The 80 cent-an-hour method that started in March 2020 is ending on June 30 
  • That means electricity, heating, phone calls will need to be manually added up 
  • H&R Block’s Mark Chapman said home-based staff now needed to keep receipts

Australians who work from home will no longer be able to claim a shortcut method when they put in their tax return next year.

Since the pandemic began in March 2020, professionals have been able to claim a flat 80 cent-an-hour rate for their expenses instead of having to manually add them up.

The shortcut was meant to have ended on June 30, 2021 but the Australian Taxation Office extended it for another year as Sydney and Melbourne were placed into long lockdowns.

With the Delta outbreaks no longer forcing people to work from home, from July 1 the convenient 80-cent an hour method will no longer be available.

Instead, those working from home will be required to keep their electricity, internet and phone bills and manually add up their expenses to claim a lower 52-cent an hour deduction.

Australians who work from home will no longer be able to claim a shortcut method when they put in their tax return next year (pictured is a stock image)

Australians who work from home will no longer be able to claim a shortcut method when they put in their tax return next year (pictured is a stock image)

Tax agent H&R Block’s director of tax communications Mark Chapman said those still working from home would need to get into a habit of keeping their receipts.

What’s changing on July 1?

Under the outgoing 80-cent an hour method, those working from home can claim a flat rate without having to manually add up their expenses

But from July 1, that shortcut will no longer be available 

That means those working from home will have to claim a lower 52-cent an hour rate and manually add up their electricity and heating bills related to a set floorspace, along with phone expenses and furniture depreciation 

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‘It does mean from the first of July, basically taxpayers are going to have to be much more prepared,’ he told Daily Mail Australia.

‘They’re going to have to have it at front of mind that they need to keep copies of their documentation.

‘We educating the clients they need to keep a certain degree of documentation.

‘If you relied on that 80-cent rate, you’re going to face a large adjustment as we move into the new tax year because you will have to keep considerably more records.’

The existing 80-cent an hour rule will still be available for those filing their tax return for the 2021-22 financial year.

‘If you’re doing your tax return for this year, you don’t need to worry about it,’ Mr Chapman said.

‘You don’t want to get to this time next year and you suddenly realise, “Oh, I’ve not kept copies of any documentation therefore I’m not potentially going to be able to claim”.’

Mr Chapman said the tax office made the wrong decision to axe the convenient but temporary 80-cent an hour method, even though it typically yielded a smaller return and therefore put less pressure on government revenue.

‘I certainly don’t think it was too costly because it usually produced a lower deduction so it was probably advantageous to the ATO,’ he said.

‘The ATO takes the view that the pandemic is over. 

‘If the ATO does think that everyone’s going to be heading back to an office, they’re probably mistaken.’ 

Australian Taxation Office assistant commissioner Tim Loh said a new method was likely to announced later this year for those working from home. 

‘We are looking to modernise the working from home methods for the 2022-23 financial year and we will consult as we always do and expect to be able to provide information about this later in the calendar year,’ he said.

H&R Block calculated those using the 52-cent an hour method, on average, yielded tax refunds of $2,600 compared with $1,100 for those who used the outgoing 80 cent an hour method.

From July 1, those working from home seeking a tax refund will need to use the 52-cent an hour method and add up their expenses for lighting, heating or cooling their work area in the home and a depreciation in the value of their furniture.

But depreciation on computers and mobile phones have to be submitted manually. 

Individuals have until October 31 to lodge their tax returns.

Tax agent H&R Block's director of tax communications Mark Chapman said those still working from home would need to get into a habit of keeping their receipts (pictured is a Zoom room in a NSW home)

Tax agent H&R Block’s director of tax communications Mark Chapman said those still working from home would need to get into a habit of keeping their receipts (pictured is a Zoom room in a NSW home)

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