ATO's massive tax change for Aussies working from home
The Australian Taxation Office is warning Aussies of major work from home changes this year.
Major tax changes are coming for the millions of Aussies who work from home.
The Australian Taxation Office (ATO) has announced changes to the “fixed rate” method of claiming work from home tax deductions.
Aussies can currently use either the “fixed rate” method or the “actual cost” (which is not being changed).
Also read: These Aussies may soon be hit with much higher taxes
Also read: ATO lends helping hand to Aussies earning under $60,000
Under the refresh, the fixed rate method - which applies to things like energy bills, phone usage and internet - will increase from 52 cents to 67 cents per hour for the 2022-23 income year onwards.
“Items that are difficult and tedious for everyday Aussies to calculate actual work-use, like phone, internet and electricity expenses, are included in the revised rate,” ATO assistant commissioner Tim Loh explained.
“Assets and equipment that typically give taxpayers a bigger deduction, such as technological items and office furniture, are not included in the revised rate and need to be claimed separately.”
Another change is that you’ll no longer need to have a dedicated home office space to make use of the fixed rate method.
It follows the end of the “shortcut method”, which was introduced during the pandemic and allowed Aussies to claim 80 cents per hour.
CPA Australia senior manager of tax policy Elinor Kasapidis said millions of Aussies needed to know about the changes.
“Some Australians will still be under the impression they can claim a work from home deduction in the same way as they did during the height of the pandemic. This will not be the case after March 1,” Kasapidis said.
“Australians will need to keep an ongoing diary for each day of the year they work from home from March onwards. 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.”
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to our free daily newsletter.