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Home Office deduction during Covid-19

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Newbie

Views 290

Replies 2

I purchased a monitor and a chair to work from home during Covid-19.

Each individually cost less than $300

Can I claim both as an immediate deduction ?

1 ACCEPTED SOLUTION

Accepted Solutions
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Best answer

Devotee

Replies 0

Hi @Lisa4 ,

Both monitor and chair are deprecitiable items. However, there are heaps of rules to consider. Let's speak about each item separetely.

 

A monitor.

The immediate deduction is available if all of the following tests are met for the asset:

Source

 

Assuming, your PC (which you attached your monitor to) was purchased not in 2019/2020 financial year OR you purchased this monitor to repalce the broken one, all the tests above will be passed. If not, you have to attach this monitor to the cost of the PC and depreciate it (I suggest to use a tax accountant if this is a case).

 

There are 3 methods you can claim Home Office expenses:

1.  fixed rate 52 cents for each hour you work (available 01/07/2019 - 30/06/2020):

You can claim a deduction of 52 cents for each hour you work from home instead of recording all of your actual expenses for heating, cooling, lighting, cleaning and the decline in value of furniture. On top of this rate you also can claim 

- phone and internet expenses
- computer consumables and stationery
- decline in value on computers or other equipment.

>>>>>So, if use this method, you can claim the cost of monitor as immediate deduction on top of 52 cents per hour<<<<<

 

2. shortcut method ─ claim a rate of 80 cents per work hour for all additional running expenses (available 01/03/2020 - 30/06/2020):

The shortcut method rate covers all deductible running expenses, including:

  • electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses
  • the decline in value and repair of capital items, such as home office furniture and furnishings
  • cleaning expenses
  • your phone costs, including the decline in value of the handset
  • your internet costs
  • computer consumables, such as printer ink
  • stationery
  • the decline in value of a computer, laptop or similar device.

>>>>>So, if use this method, you can NOT claim the cost of monitor as immediate deduction as it is included in 80 cents per hour rate<<<<<

 

3. Actual expenses  (available 01/07/2019 - 30/06/2020)
If you have a dedicated work area, you can claim additional running costs and the decline in value of office furniture used in the area for work purposes. To calculate actual expenses for your dedicated work area, you can:

<...>

- work out the decline in value of depreciating assets (including immediate deduction less $300) and keep receipts showing the amount you spent on the assets.

<...>

>>>>>So, if use this method, you can claim the cost of monitor as immediate deduction of actual expense<<<<<

 

***********************************************************************************

 

A chair.

The immediate deduction is available if all of the following tests are met for the asset:

Source

 

There are 3 methods you can claim Home Office expenses:

1.  fixed rate 52 cents for each hour you work (available 01/07/2019 - 30/06/2020):

You can claim a deduction of 52 cents for each hour you work from home instead of recording all of your actual expenses for heating, cooling, lighting, cleaning and the decline in value of furniture. On top of this rate you also can claim 

- phone and internet expenses
- computer consumables and stationery
- decline in value on computers or other equipment.

>>>>>So, if use this method, you can NOT claim the cost of chair as immediate deduction because it is a part of 52 cents per hour<<<<<

 

2. shortcut method ─ claim a rate of 80 cents per work hour for all additional running expenses (available 01/03/2020 - 30/06/2020):

The shortcut method rate covers all deductible running expenses, including:

  • electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses
  • the decline in value and repair of capital items, such as home office furniture and furnishings
  • cleaning expenses
  • your phone costs, including the decline in value of the handset
  • your internet costs
  • computer consumables, such as printer ink
  • stationery
  • the decline in value of a computer, laptop or similar device.

>>>>>So, if use this method, you can NOT claim the cost of chair as immediate deduction as it is included in 80 cents per hour rate<<<<<

 

3. Actual expenses  (available 01/07/2019 - 30/06/2020)
If you have a dedicated work area, you can claim additional running costs and the decline in value of office furniture used in the area for work purposes. To calculate actual expenses for your dedicated work area, you can:

<...>

- work out the decline in value of depreciating assets (including immediate deduction less $300) and keep receipts showing the amount you spent on the assets.

<...>

>>>>>So, if use this method, you can claim the cost of chair as immediate deduction of actual expense<<<<<

 

I know it is all a little bit confusing, and to be honest I would advise to use a tax accountant.

 

I hope it will help Smiley Wink

--------------------------------------------
“We can not build our own future without helping others build theirs.” Smiley Wink
2 REPLIES 2
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Community Support

Replies 0

Hi @Lisa4 , thank you for your question.

For employees working from home as a result of COVID-19, you may be able to claim a deduction for expenses relating to that work. Our website provides specific information about home office expenses.

I hope you find this information helpful.

 

Thanks,

IssyG

Highlighted

Best answer

Devotee

Replies 0

Hi @Lisa4 ,

Both monitor and chair are deprecitiable items. However, there are heaps of rules to consider. Let's speak about each item separetely.

 

A monitor.

The immediate deduction is available if all of the following tests are met for the asset:

Source

 

Assuming, your PC (which you attached your monitor to) was purchased not in 2019/2020 financial year OR you purchased this monitor to repalce the broken one, all the tests above will be passed. If not, you have to attach this monitor to the cost of the PC and depreciate it (I suggest to use a tax accountant if this is a case).

 

There are 3 methods you can claim Home Office expenses:

1.  fixed rate 52 cents for each hour you work (available 01/07/2019 - 30/06/2020):

You can claim a deduction of 52 cents for each hour you work from home instead of recording all of your actual expenses for heating, cooling, lighting, cleaning and the decline in value of furniture. On top of this rate you also can claim 

- phone and internet expenses
- computer consumables and stationery
- decline in value on computers or other equipment.

>>>>>So, if use this method, you can claim the cost of monitor as immediate deduction on top of 52 cents per hour<<<<<

 

2. shortcut method ─ claim a rate of 80 cents per work hour for all additional running expenses (available 01/03/2020 - 30/06/2020):

The shortcut method rate covers all deductible running expenses, including:

  • electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses
  • the decline in value and repair of capital items, such as home office furniture and furnishings
  • cleaning expenses
  • your phone costs, including the decline in value of the handset
  • your internet costs
  • computer consumables, such as printer ink
  • stationery
  • the decline in value of a computer, laptop or similar device.

>>>>>So, if use this method, you can NOT claim the cost of monitor as immediate deduction as it is included in 80 cents per hour rate<<<<<

 

3. Actual expenses  (available 01/07/2019 - 30/06/2020)
If you have a dedicated work area, you can claim additional running costs and the decline in value of office furniture used in the area for work purposes. To calculate actual expenses for your dedicated work area, you can:

<...>

- work out the decline in value of depreciating assets (including immediate deduction less $300) and keep receipts showing the amount you spent on the assets.

<...>

>>>>>So, if use this method, you can claim the cost of monitor as immediate deduction of actual expense<<<<<

 

***********************************************************************************

 

A chair.

The immediate deduction is available if all of the following tests are met for the asset:

Source

 

There are 3 methods you can claim Home Office expenses:

1.  fixed rate 52 cents for each hour you work (available 01/07/2019 - 30/06/2020):

You can claim a deduction of 52 cents for each hour you work from home instead of recording all of your actual expenses for heating, cooling, lighting, cleaning and the decline in value of furniture. On top of this rate you also can claim 

- phone and internet expenses
- computer consumables and stationery
- decline in value on computers or other equipment.

>>>>>So, if use this method, you can NOT claim the cost of chair as immediate deduction because it is a part of 52 cents per hour<<<<<

 

2. shortcut method ─ claim a rate of 80 cents per work hour for all additional running expenses (available 01/03/2020 - 30/06/2020):

The shortcut method rate covers all deductible running expenses, including:

  • electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses
  • the decline in value and repair of capital items, such as home office furniture and furnishings
  • cleaning expenses
  • your phone costs, including the decline in value of the handset
  • your internet costs
  • computer consumables, such as printer ink
  • stationery
  • the decline in value of a computer, laptop or similar device.

>>>>>So, if use this method, you can NOT claim the cost of chair as immediate deduction as it is included in 80 cents per hour rate<<<<<

 

3. Actual expenses  (available 01/07/2019 - 30/06/2020)
If you have a dedicated work area, you can claim additional running costs and the decline in value of office furniture used in the area for work purposes. To calculate actual expenses for your dedicated work area, you can:

<...>

- work out the decline in value of depreciating assets (including immediate deduction less $300) and keep receipts showing the amount you spent on the assets.

<...>

>>>>>So, if use this method, you can claim the cost of chair as immediate deduction of actual expense<<<<<

 

I know it is all a little bit confusing, and to be honest I would advise to use a tax accountant.

 

I hope it will help Smiley Wink

--------------------------------------------
“We can not build our own future without helping others build theirs.” Smiley Wink