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Re: Shortcut method and claiming depreciation on work-related assets

Devotee

Views 95

Replies 2

Hi Pls help me with the below question.

 

Q1

 

Generally one cannot claim depreciation while also using the shortcut method.

 

a) Does this restriction only apply to assets purchased during the  March 20 - and June 2021 period. Or

 

b) If a work-related asset was purchased around 2 years ago ( to work from home ) but is still being depreciated, is the depreciation charge corresponding to the March 20 -June 21 restricted as well?

 

Q 2 

 

An asset was purchased during March 20 - June 21 with the intention of being used at a work place but instead was used in working from home. 

 

Will, there be a restriction in claiming depreciation on that asset as well ( if using the short cut method ) ?

 

 

Thank you

 

 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 1

Hi @Joachim

 

Both the shortcut method and the fixed cost method take depreciation into account.

 

The shortcut method includes decline in value of all items. If you're using this method, it covers depreciation of all items in your home office for this time. This means it covers pre-existing depreciation (answer b). You'll need to adjust your depreciation schedule of existing items to account for this if you use the shortcut method.

 

The shortcut method takes all costs into account for working at home. If you use the shortcut method, you don't need to work out your claim for any other part of your home office.

 

It sounds like so far you've been using the actual cost method. It may be more beneficial in your situation to continue doing so if you have several depreciating office items already.

 

Whether the equipment was purchased for in-office use or home office use will not change your eligibility to claim a deduction or how it's calculated.

 

You can read about home office expenses on our website.

2 REPLIES 2

Most helpful response

ATO Community Support

Replies 1

Hi @Joachim

 

Both the shortcut method and the fixed cost method take depreciation into account.

 

The shortcut method includes decline in value of all items. If you're using this method, it covers depreciation of all items in your home office for this time. This means it covers pre-existing depreciation (answer b). You'll need to adjust your depreciation schedule of existing items to account for this if you use the shortcut method.

 

The shortcut method takes all costs into account for working at home. If you use the shortcut method, you don't need to work out your claim for any other part of your home office.

 

It sounds like so far you've been using the actual cost method. It may be more beneficial in your situation to continue doing so if you have several depreciating office items already.

 

Whether the equipment was purchased for in-office use or home office use will not change your eligibility to claim a deduction or how it's calculated.

 

You can read about home office expenses on our website.

Devotee

Replies 0

@BlakeATO thank you