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Home Office Expenses: What Records to Keep for Tax Deductions

As more and more people are working from home, it is important to understand what records you need to keep in order to claim tax deductions for your home office expenses in Australia. In this article, we will discuss the records you need to keep and the changes to record keeping from 1 March 2023 to enable an eligible tax deductions for home office expenses.

Firstly, it is important to note that you can only claim tax deductions for expenses that are directly related to your work. This means that if you use your home office for personal purposes as well, you can only claim a portion of the expenses that are related to your work.

Home office running expenses: This includes expenses such as electricity, gas, and internet bills. To claim tax deductions for these expenses, you need to keep records of the actual expenses incurred or use a fixed rate per hour.

Let’s talk about the records you need to keep and the changes to record keeping requirements from 1 March 2023 onwards to enable a claim for home office.

You must keep a record of the actual hours you worked from home between 1 March 2023 and 30 June 2023. No estimates will be accepted.

You must record these hours regularly, throughout the year, using one of the following methods:
Timesheets
Rosters
Employer system logs or online business systems
Time-tracking apps
A regularly updated diary, calendar, logbook, spreadsheet, or similar document.

You must keep a record of the home office running expenses you paid for that relate to your hours worked at home

Other changes to home office expenses in 2023
The rate per hour you can claim has increased from 52 cents per hour to 67 cents for each hour you work from home.
You no longer need a designated working area or home office.

The fixed rate of 67 cents per hour now INCLUDES some expenses that you used to claim separately; that could mean less money for you.

In 2023 you can no longer claim these items individually, if you claim the 67 cents per hour:

• Internet expenses
  Home and mobile phone expenses
  Electricity and gas used for heating, cooling and lighting
  Stationery and computer consumables (printer ink, paper etc.)

There are a few extra deductions you can still claim while also claiming the 67c per hour in 2023:

• Depreciation of assets that cost more than $300 such as office furniture, computers and mobile phones.
  Expenses for work-related purchases up to $300, such as desk chairs and monitors.
  The cost of cleaning your home office and repairing office.

In conclusion, if you are planning to work from home in 2023, it is important to keep accurate records of your home office expenses, work-related expenses, time spent working, home office layout, and employment details. By doing so, you can ensure that you are able to claim all the deductions you are entitled to, and avoid any potential issues with the Australian Taxation Office. So, start keeping track of your records now, and make the most of your home office deductions in 2023!

If you are unsure how to keep track of all these items please contact us for one of our home office record keeping workbooks that we have for sale.