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Lodging your tax return COVID-19 Edition

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As many of us would already know, lodging your tax return at the end of this financial year may be different compared to previous years. COVID-19 has resulted in many disruptions in the workplace causing some companies to relocate their staff to work from home. The Australian Taxation Office (ATO) has recognised this and has implemented a different method to claim some of your expenses this year.

From 1 March 2020 until at least 30 June 2020 the ATO will accept a temporary simplified method (shortcut method) of calculating additional running expenses. This period may be extended depending on when work patterns return to normal.

Shortcut method

You can claim a deduction of 80 cents for each hour you work from home due to COVID-19 as long as you:

  • Are working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls
  • Are incurring additional deductible running expenses as a result of working from home.
  • Do not have to have a separate or dedicated area of your home set aside for working, such as a private study.

The shortcut method rate covers all deductible running expenses, including:

  • electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses
  • the decline in value and repair of capital items, such as home office furniture and furnishings
  • cleaning expenses
  • your phone costs, including the decline in value of the handset
  • your internet costs
  • computer consumables, such as printer ink
  • stationery
  • the decline in value of a computer, laptop or similar device.

You do not have to incur all of these expenses, but you must have incurred additional expenses in some of those categories as a result of working from home due to COVID-19.

If you use the shortcut method to claim a deduction for your additional running expenses, you cannot claim a further deduction for any of the expenses listed above.

You must keep a record of the number of hours you have worked from home as a result of COVID-19. Examples are timesheets, diary notes or rosters.

If you use the shortcut method to claim a deduction and you lodge your 2019–20 tax return through myGov or a tax agent, you must include the note ‘COVID-hourly rate’ in your tax return.

For further information on lodging your tax return and more deductions you may be able to claim please visit www.ato.gov.au. This article was directly sourced from the ATO website, full article available here.

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