Is it Tax Deductible?
**Note: Information is a guide only and relevant to Australian residents only – It IS definitely worth speaking to your accountant in your respective country to ascertain what you can claim**
Now that the majority of people are working from home and crashing the @zoom platform as the uptake on virtual conferencing increases you may be thinking about what you can claim tax wise as we head to the 30 June 2020 year end.
We all love getting a tax refund so when you have been forced to work from home you may have additional deductions that aren’t normally part of your tax return.
As a Chartered Accountant I have always attempted to ensure that my clients paid the correct amount of tax and that meant identifying all avenues of potential tax deductions that they were eligible for.
Key deductions could include:
Office consumables – think toners, paper, stationary, work books, staplers, calculators
POWER! – has your daily electric usage gone up? This may be due to lighting, computer screens, laptops, etc all being used more often
Internet connections: Have you had to increase your plan or using more of your personal data
Mobile phone: previously you may have used the work phone but now you are home and using your own mobile or your works carrier doesn’t work in your area so you are using your own phone more.
Rent???? This is a biggy! If you have a dedicated space for your office and you a paying rent you may be able to apportion some of your rental expenses to that area.
Depreciation (or upfront claim for assets costing less than $300) on any new office furniture, equipment or peripheral devices to enable you to work from home (or if there is some life left in that old desk chair you ‘could’ look at it value and look to start depreciating that)!
This is just a start, you may incur other costs for subscriptions, postage, Phone Apps to scan documents etc.
One question that generally gets asked quite often: Can I deduct my interest on my mortgage payments?
Well…..every situation is different – like the rental example above there may be a nexus between the cost of your mortgage and your work, however the benefit of the deduction now doesn’t may be outweighed by the portion of Capital Gains Tax (CGT) you may have to pay when and if you sell your main residence which is usually exempt from tax!
The offset to these deductions is the likely decrease in many peoples travel claims – if you usually claim a cents per km or % of use then you will need to adjust these for the reduced travel so be prepared that IF this is usually your largest deduction that it may be less this financial year.
Everybody’s situation is different but it is worth keeping your receipts, and if you can keep track of receipts, take a photo and save to an Expense folder for your accountant to determine if its deductible or not.
- Coach Rach
