Written

For

The

Australian

-

Tax

benefits

of

working

from

home

during

cononavirus

crisis

The dining table has officially become Australia's newest office — and the ATO has just thrown remote workers a bone to make the transition a little less painful.

Earlier this week, the ATO surprised even seasoned tax professionals with a shake-up to how working-from-home deductions can be claimed. Running from 1 March to 30 June (and possibly extended), it introduces a new "shortcut method" at 80c per hour, covering all running expenses tied to working from home.

Here's how it stacks up. The pre-existing method allowed 52c per hour for heating, cooling, lighting, cleaning and the decline in furniture value — but you could still separately claim phone, internet, stationery and computer depreciation. The new 80c rate is all-encompassing. Simpler, yes, but not always more generous.

For anyone who has splashed out on a new desk, monitor, printer or ergonomic chair to survive lockdown, the actual cost method may deliver a bigger deduction. As Rothsay Chartered Accountants partner Ghafur Barchia told me, the work-related share of phone, internet, Zoom subscriptions, stationery and equipment set-up costs can add up substantially for full-time home workers.

A couple of traps worth flagging. Private expenses — including your morning coffee and lunch — remain off limits, just as they would be at the office. And no, wage earners cannot suddenly start claiming mortgage repayments, rent or council rates. That door remains firmly shut (business owners are a different story, but should tread carefully around CGT implications on the family home).

One welcome concession: the ATO has scrapped the "dedicated work area" requirement under the shortcut method. With Mum on the kitchen bench, Dad on the couch and kids home-schooling in between, that rule was never going to survive 2020.

My take? Keep a diary of your hours now, hang onto receipts for bigger purchases, and let your tax agent run both methods at year end.