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{"id":6221,"date":"2023-03-15T06:33:38","date_gmt":"2023-03-15T06:33:38","guid":{"rendered":"zahr.com.au\/?p=6221"},"modified":"2023-06-01T06:39:10","modified_gmt":"2023-06-01T06:39:10","slug":"working-from-home-tax-deductions","status":"publish","type":"post","link":"https:\/\/zahrpartners.com.au\/zahr\/working-from-home-tax-deductions\/","title":{"rendered":"Watch out for working from home tax deductions"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"6221\" class=\"elementor elementor-6221\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-4030e330 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"4030e330\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-477105f2\" data-id=\"477105f2\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-3da6c3db elementor-widget elementor-widget-text-editor\" data-id=\"3da6c3db\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.13.2 - 11-05-2023 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<div class=\"text-block css-rk9olg\" style=\"margin: 0px auto; min-width: 0px; width: 960px; padding-left: 64px; padding-right: 64px; max-width: 960px; color: #00081b; font-family: Avenir, sans-serif; font-size: 16px;\">\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\"><span class=\"introduction\" style=\"font-size: 28px; font-family: 'Fivo Sans', sans-serif;\">The Australian Taxation Office (ATO) has updated its approach to how you claim expenses for working from home.<\/span><\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">The ATO has \u2018<a class=\" css-d9fmj4\" style=\"cursor: pointer; color: #a9b236; transition-duration: 400ms; transition-timing-function: ease; transition-property: color; display: inline-flex; -webkit-box-align: center; align-items: center; font-weight: 600; position: relative; margin: 0px; min-width: 0px;\" href=\"https:\/\/www.ato.gov.au\/Media-centre\/Media-releases\/ATO-announces-changes-to-working-from-home-deductions\/\" target=\"_blank\" rel=\"noopener noreferrer\">refreshed<\/a>\u2019 the way you can claim deductions for the costs you incur when you work from home. From 1 July 2022 onwards, you can\u00a0<a class=\" css-d9fmj4\" style=\"cursor: pointer; color: #a9b236; transition-duration: 400ms; transition-timing-function: ease; transition-property: color; display: inline-flex; -webkit-box-align: center; align-items: center; font-weight: 600; position: relative; margin: 0px; min-width: 0px;\" href=\"https:\/\/www.ato.gov.au\/uploadedFiles\/Content\/IAI\/Downloads\/Toolkits\/TaxTimeToolkit_Workingfromhomededuction.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">choose<\/a>\u00a0either to use a new \u2018fixed rate\u2019 method (67 cents per hour), or the \u2018actual cost\u2019 method depending on what works out best for your scenario. Either way, you will need to gather and retain certain records to make a claim.<\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">The first issue for claiming any deduction is that there must be<a class=\" css-d9fmj4\" style=\"cursor: pointer; color: #a9b236; transition-duration: 400ms; transition-timing-function: ease; transition-property: color; display: inline-flex; -webkit-box-align: center; align-items: center; font-weight: 600; position: relative; margin: 0px; min-width: 0px;\" href=\"https:\/\/www.ato.gov.au\/individuals\/income-and-deductions\/deductions-you-can-claim\/working-from-home-expenses\/#Eligibilitytoclaim2\" target=\"_blank\" rel=\"noopener noreferrer\">a link<\/a>\u00a0between the costs you incurred and the way you earn your income. If you incur an expense but it doesn\u2019t relate to your work, or only partially relates to your work, you\u00a0<a class=\" css-d9fmj4\" style=\"cursor: pointer; color: #a9b236; transition-duration: 400ms; transition-timing-function: ease; transition-property: color; display: inline-flex; -webkit-box-align: center; align-items: center; font-weight: 600; position: relative; margin: 0px; min-width: 0px;\" href=\"https:\/\/www.ato.gov.au\/individuals\/income-and-deductions\/deductions-you-can-claim\/working-from-home-expenses\/#Expensesyoucantclaim1\" target=\"_blank\" rel=\"noopener noreferrer\">cannot claim<\/a>\u00a0the full cost as a deduction.<\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">The second key issue is that you need to incur costs associated with working from home. For example, if you are living with your parents and not picking up any of the expenses for running the home then you can\u2019t claim deductions for working from home as you have not incurred the expenses, even if you are paying board (the ATO treats this as a private arrangement).<\/p>\n<h4 style=\"font-family: 'Fivo Sans', sans-serif; margin-top: 2em; margin-bottom: 0.6em; font-size: 31px;\">The new \u2018fixed rate\u2019 method<\/h4>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">Previously, there were\u00a0<a class=\" css-d9fmj4\" style=\"cursor: pointer; color: #a9b236; transition-duration: 400ms; transition-timing-function: ease; transition-property: color; display: inline-flex; -webkit-box-align: center; align-items: center; font-weight: 600; position: relative; margin: 0px; min-width: 0px;\" href=\"https:\/\/www.ato.gov.au\/individuals\/income-and-deductions\/deductions-you-can-claim\/working-from-home-expenses\/\" target=\"_blank\" rel=\"noopener noreferrer\">two fixed rate methods<\/a>\u00a0to choose from for the 2021-22 income year:<\/p>\n<ul style=\"font-size: 21px; margin-top: 0.5em; margin-bottom: 0.5em; max-width: 832px;\">\n<li style=\"margin-top: 0.5em; margin-bottom: 0.5em; max-width: 832px;\">A cover-all 80 cents per hour rate for expenses incurred while working from home (which was available from 1 March 2020). This COVID-19 related rate was intended to cover all additional running expenses incurred while working from home; or<\/li>\n<li style=\"margin-top: 0.5em; margin-bottom: 0.5em; max-width: 832px;\">If you had a space dedicated to work but were not running a business from home, you could claim 52 cents for every hour you worked from home to cover the running expenses of your home. This rate doesn\u2019t cover certain items such as the depreciation of electronic devices, which can be claimed separately.<\/li>\n<\/ul>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">It\u2019s clear that working from home arrangements are here to stay for many workplaces even though COVID restrictions have eased. So, from the 2022-23 financial year onwards, the ATO has combined these two fixed rate methods to create one revised method accessible by anyone working from home, regardless of whether they have a dedicated space or are just working at the kitchen table.<\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\"><span class=\"introduction\" style=\"font-size: 28px; font-family: 'Fivo Sans', sans-serif;\">The new rate is 67 cents per hour and covers your energy expenses (electricity and gas), phone usage (mobile and home), internet, stationery, and computer consumables.<\/span><\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">You can separately claim the cost of the decline in value of assets such as computers, repairs, and maintenance for these assets, and if you have a dedicated home office, the cost of cleaning the office.<\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">If there is more than one person working from the same home, each person can make a claim using the fixed rate method if they meet the basic eligibility conditions.<\/p>\n<h4 style=\"font-family: 'Fivo Sans', sans-serif; margin-top: 2em; margin-bottom: 0.6em; font-size: 31px;\">What proof do the ATO need that I am working from home?<\/h4>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">To use the fixed rate method, you will\u00a0<a class=\" css-d9fmj4\" style=\"cursor: pointer; color: #a9b236; transition-duration: 400ms; transition-timing-function: ease; transition-property: color; display: inline-flex; -webkit-box-align: center; align-items: center; font-weight: 600; position: relative; margin: 0px; min-width: 0px;\" href=\"https:\/\/www.ato.gov.au\/Tax-professionals\/Newsroom\/Income-tax\/Working-from-home-deduction-changes-for-2022-23\/\" target=\"_blank\" rel=\"noopener noreferrer\">need a record<\/a>\u00a0of all of the hours you worked from home. The ATO has warned that it will no longer accept estimates or a sample diary over a four week period. For example, if you normally work from home on Mondays but one day you have an in-person meeting outside of your home, your diary should show that you did not work from home for at least a portion of that day.<\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">Having said that, the ATO will allow taxpayers to keep a record which is representative of the total number of hours worked from home during the period from 1 July 2022 to 28 February 2023.<\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">There is nothing in the ATO guidance to suggest that claims are limited to standard office hours. That is, if you work from home outside standard office hours or over the weekend, then make sure you keep an accurate record of the hours you are working so that you can maximise your deductions.<\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">The ATO has warned that it will no longer accept estimates or a sample diary over a four week period for the 67 cents fixed rate method of claiming work from home deductions.<\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\"><span class=\"introduction\" style=\"font-size: 28px; font-family: 'Fivo Sans', sans-serif;\">From 1 March 2023 You will need to demonstrate the actual hours you worked from home.<\/span><\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">You also need to keep a copy of at least one document for each running cost you have incurred during the year which is covered by the fixed rate method. This could include invoices, bills or credit card statements. Where bills are in the name of one member of a household but the cost is shared, each member of the household who contributes to the payment of that expense will be taken to have incurred it. For example, a husband and wife, or flatmates where they jointly contribute to costs.<\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">You need to keep these records for five years so that if the ATO come calling, you can prove your claim. If this proof is not available at the time, the deduction will be denied. If your work from home diary is electronic, ensure you can access this diary over time (such as producing a PDF summary of your calendar at the end of each financial year clearly showing the dates and times of your work).<\/p>\n<p style=\"font-size: 21px; margin-top: 1em; margin-bottom: 0.5em; max-width: 832px;\">Contact our experienced\u00a0<a class=\" css-d9fmj4\" style=\"cursor: pointer; color: #a9b236; transition-duration: 400ms; transition-timing-function: ease; transition-property: color; display: inline-flex; -webkit-box-align: center; align-items: center; font-weight: 600; position: relative; margin: 0px; min-width: 0px;\" href=\"https:\/\/www.zahr.com.au\/team\/hussein-zahr\" target=\"_blank\" rel=\"noopener\">tax specialists<\/a>\u00a0today to discuss your eligibility to apply working from home tax deductions.<\/p>\n<\/div>\n<div class=\"image css-1kbd7og\" style=\"min-width: 0px; width: 960px; margin: 32px auto; padding-left: 64px; padding-right: 64px; max-width: 960px; color: #00081b; font-family: Avenir, sans-serif; font-size: 16px;\">\n<div class=\"css-dgze5n\" style=\"margin: 0px -32px; min-width: 0px;\"><img decoding=\"async\" src=\"https:\/\/images.prismic.io\/zahr\/7e4ab9d1-0feb-4d5a-b44e-c96617390063_Zahr_Team_Hussein-Zahr_02%402x.jpg?auto=compress,format&amp;rect=0,28,1040,541&amp;w=1040&amp;h=541&amp;max-w=1536&amp;fit=crop\" alt=\"Hussein Zahr is an experienced tax accountant\" \/>\n<div class=\"css-1d7oj4\" style=\"margin: 8px 0px 0px; min-width: 0px; display: flex; -webkit-box-pack: justify; justify-content: space-between; font-size: 14px;\">\n<div class=\"css-t6ixm7\" style=\"margin: 0px; min-width: 0px; color: #a9b236;\">\/\/\/\/\/\/<\/div>\nContact Hussein to discuss your eligibility to access these tax deductions on your next return.<\/div>\n<\/div>\n<\/div>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>The ATO has \u2018refreshed\u2019 the way you can claim deductions for the costs you incur when you work from home.<\/p>\n","protected":false},"author":2,"featured_media":6223,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-6221","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"featured_image_src_large":["https:\/\/zahrpartners.com.au\/zahr\/wp-content\/uploads\/2023\/03\/eInsights-wfh-tax-deductions-1024x385.jpg",1024,385,true],"author_info":{"display_name":"Tiani Rubal","author_link":"https:\/\/zahrpartners.com.au\/zahr\/author\/tiani\/"},"comment_info":0,"category_info":[{"term_id":1,"name":"Uncategorized","slug":"uncategorized","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":43,"filter":"raw","cat_ID":1,"category_count":43,"category_description":"","cat_name":"Uncategorized","category_nicename":"uncategorized","category_parent":0}],"tag_info":false,"taxonomy_info":{"category":[{"value":1,"label":"Uncategorized"}]},"_links":{"self":[{"href":"https:\/\/zahrpartners.com.au\/zahr\/wp-json\/wp\/v2\/posts\/6221","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zahrpartners.com.au\/zahr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zahrpartners.com.au\/zahr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zahrpartners.com.au\/zahr\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/zahrpartners.com.au\/zahr\/wp-json\/wp\/v2\/comments?post=6221"}],"version-history":[{"count":5,"href":"https:\/\/zahrpartners.com.au\/zahr\/wp-json\/wp\/v2\/posts\/6221\/revisions"}],"predecessor-version":[{"id":6227,"href":"https:\/\/zahrpartners.com.au\/zahr\/wp-json\/wp\/v2\/posts\/6221\/revisions\/6227"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zahrpartners.com.au\/zahr\/wp-json\/wp\/v2\/media\/6223"}],"wp:attachment":[{"href":"https:\/\/zahrpartners.com.au\/zahr\/wp-json\/wp\/v2\/media?parent=6221"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zahrpartners.com.au\/zahr\/wp-json\/wp\/v2\/categories?post=6221"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zahrpartners.com.au\/zahr\/wp-json\/wp\/v2\/tags?post=6221"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}