Temporary home office expenses shortcut extended again

 

The 80 cents per hour work-from-home deduction method has now been extended for a further three months to the end of the year.

 

   

The temporary shortcut method for calculating home office expenses has now been extended to 31 December 2020, after it was due to expire at the end of September.

Taxpayers have been able to apply the 80 cents per hour method since March, after the ATO introduced the temporary method in light of COVID-19 restrictions forcing many workers to adopt remote working practices.

The extension comes as most workers in metropolitan Melbourne continue to be barred from returning to their workplace as the Victorian government works through its reopening roadmap.

The ATO’s updated Practical Compliance Guideline 2020/3 notes that the 31 December end date will be revisited and may be further extended.

Tax &  Super Australia tax counsel John Jeffreys welcomed the extension but urged taxpayers to ensure they were not accidentally double dipping on other working-from-home expenses.

“Employees working from home should note that if they use the ATO’s shortcut method for home office expenses, they can’t claim other home office-related items, such as technology, desks, monitors and chairs. It’s a one or the other approach. Some may be mistaken about this,” Mr Jeffreys said.

“Finally, when the ATO outlined its shortcut method, it noted that taxpayers should keep adequate records — diary notes, timesheets or rosters — to substantiate work.

“It’s unlikely the ATO would audit this, but it’s worth employees having this evidence just in case. It could be that significantly higher claim by an employee compared to benchmark claims for same hours worked would be a red flag to the ATO.”

The temporary shortcut method will continue to be supplementary to the 52 cents fixed rate method and the actual cost method of calculating running expenses, with taxpayers able to choose the appropriate method for their circumstances.

View the ATO’s updated PCG 2020/3 here.

 

 

Jotham Lian 
30 September 2020
accountantsdaily.com.au

Prosperity Financial Planning Pty Ltd (ABN 91 161 761 208) trading as Prosperity Financial Planning is an Authorised Representative of Affinia Financial Advisers Ltd ABN 13 085 335 397 Australian Financial Services Licence No. 237857

Financial Services Guide Part 1 Part 2 | Legal Disclaimer | Privacy Policy

General Advice Warning: This website contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

You don't have to be great to start, but you have to start to be great.

Zig Ziglar

Coming together is a beginning; keeping together is progress; working together is success.

Henry Ford

You must be the change you want to see in the world.

Mahatma Gandhi

Where there is no vision, the people perish.

Proverbs 29:18

The only thing to do with good advice is to pass it on. It is never of any use to oneself.

Oscar Wilde