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Working from home? Here’s what the ATO is watching

Working from home, home office

A record number of Australians are making work-from-home claims this tax time, and the ATO is gearing up to catch common blunders like phone and internet deductions. 

A high proportion of mistakes, errors and “questionable claims” is prompting the Tax Office to increase scrutiny on work-from-home expenses this tax time.

As a taxpayer, you can claim costs incurred as a direct result of working from home, but the ATO is watching for those who blur the line between private use and work use expenses.

“There is a rising trend of employees working from home, and while extra costs related to working from home are usually deductible, we are seeing some taxpayers either over-claiming or claiming private costs,” said ATO assistant commissioner Kath Anderson.

“There is mounting evidence that many taxpayers don’t know what they can and cannot claim. In particular, we are seeing some taxpayers claiming expenses they never paid for, expenses their employer reimbursed, private expenses and expenses with no supporting records.”

For example, one of the biggest issues the ATO is seeing includes people claiming the entire amount of expenses like their internet or mobile phone, not just the work-related component.

“In reality, the rest of us are subsidising their private phone calls and internet usage, which is not OK,” Ms Anderson said.

“Claims for the work-related portion of expenses like phone, internet, depreciation of your computer, printing and stationary are all allowed.”

Further, the additional costs of running expenses like electricity for heating, cooling and lighting are deductible, but you need to be able to demonstrate that there were additional costs incurred by working from home.

“If working from home means sitting in front of the TV or at the kitchen bench doing some emails, it’s unlikely that you are incurring any additional expenses. However, if you have a separate work area, then you can claim the work-related portion of running expenses for that space,” Ms Anderson said.

Working from home? Here’s what the ATO is watching
Working from home, home office
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