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Claim expenses for working from home

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As thoughts turn to tax returns, the ATO has signalled a particular focus this year on people claiming deductions for working from home.

If you're going to claim expenses for working from home, you should be careful not to claim more than you should.

Conversely, some people miss out on legitimate deductions. So what are the rules?

Work deductions

The rules

First, if you work solely or partly from home and are required to use your own computer, phone or other devices you may be able to claim a deduction for your costs.

The other deductions you may be able to claim are the work-related portion of running expenses such as:

  • Home office equipment such as computers, printers and phones. You can claim the full cost (for items up to $300) or the decline in value (for items costing $300 or more). If you're self-employed, you may be able immediately write off equipment costing up to $20,000.
  • Work-related phone calls (including mobiles) and phone rental. You can claim a portion reflecting the share of work-related use of the line if you can show you are on call, or have to phone your staff, employer or clients regularly while you are at home.
  • Heating, cooling, lighting.
  • Repairs to your home office furniture and fittings.
  • Cleaning expenses.

If you work exclusively from home and have a dedicated office, you may also be able to claim a portion of costs relating to rent or mortgage interest, as well as rates and insurance.

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Mark Chapman is director of tax communications at H&R Block, Australia's largest firm of tax accountants, and is a regular contributor to Money. Mark is the author of Life and Taxes: A Look at Life Through Tax.
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