Tax time and the hundreds of dollars you could be missing out on unclaimed homework deductions

The COVID-19 pandemic has made remote working a harsh reality over the past two years.

But it could also mean a hefty tax break when it comes to deducting time spent in the makeshift home office or at your desk.

H&R Block’s Mark Chapman says hundreds of dollars in unclaimed deductions are “left on the table” every year.

Watch the latest news on Channel 7 or stream for free on 7plus >>

WATCH THE VIDEO ABOVE: ATO warns of tax time fraud.

But those who do must be careful how they do it.

“You have three different methods of making your claim,” he said.

These are the 80 cents per hour flat rate, the 52 cents per hour flat rate and a third rate known as the “actual” method – these are the actual costs you will incur as a result of working from home.

So which method is the best? We’re breaking it up

While it sounds like the most generous method, the 80-cent plan won’t let you claim anything else for working from home.

However, the 52-cent rate allows you to use the work-related portion of items such as B. Internet at home, mobile phone costs, depreciation of computer equipment, stationery and printer ink, can be claimed separately.

“For someone who works from home for the entire tax year, that could mean about $1,200 in additional deductions, which is an additional $390 in tax (at a 32.5 percent tax rate)” said Chapman.

H&R Block’s Mark Shaman says hundreds of dollars in unclaimed deductions are “left on the table” every year. file image. Recognition: AAP

“Typically, using the 52-cent rate results in a higher deduction because you can make separate claims for depreciation on tech equipment (laptops, computers, phones), cell phone, landline, and home internet costs, and items, in addition to the flat rate of office supplies.

“So if you’ve spent money on those extra items, the 52-cent fare is usually the way to go.

“All of these costs are included in the 80 cents per hour. So if you’re spending a lot on these items, you’re losing out by claiming 80 cents an hour.”

The ATO and its house truths

The ATO lists ongoing expenses that can be claimed while working at home as electricity costs for heating or cooling and lighting, depreciation of office furniture and equipment and other work-related items – for example laptop, internet costs and telephone costs.

In certain circumstances, occupancy expenses could also be claimed, which include mortgage interest, rent, council and water rates, property taxes and home insurance premiums.

However, the ATO says you can only claim occupancy costs if you can show:

  • it was necessary for you to work from home because your employer did not provide you with an alternative workplace
  • the area of ​​your home that you use for work is used exclusively or almost exclusively for work purposes and cannot readily be used for other purposes.

The ATO provides a practical household cost calculator here.

Meet the dreaded deadline

However, if you want to bring in those expenses and recoup those hundreds of dollars in deductions, you’d better move.

The deadline for filing your tax return is October 31, and if you accommodate yourself and don’t file it by then, you could face an immediate late-filing penalty of $222. This increases by an additional $222 for each consecutive four week period in which the refund is pending, up to a maximum of $1110.

“If you still fail to file after the maximum penalty has been reached, the ATO may issue a default judgment (indeed, an estimate of your earnings as determined by the ATO) or prosecute you,” Chapman said.

If you do not expect to be able to meet the deadline, there is an easy way to extend it: simply contact a tax advisor and register as a customer by October 31st. Then you can submit your tax return via this tax advisor until May 15, 2023.

New Zealand police caught posing as window cleaners to catch people using their cellphones.

New Zealand police caught posing as window cleaners to catch people using their cellphones.

https://7news.com.au/business/tax/tax-time-and-the-hundreds-of-dollars-you-could-be-missing-out-on-in-unclaimed-work-from-home-deductions-c-8464130 Tax time and the hundreds of dollars you could be missing out on unclaimed homework deductions

James Brien

24ssports is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@24ssports.com. The content will be deleted within 24 hours.

Related Articles

Back to top button