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Deductions - Internet Usage Acceptable Methodology

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Newbie

Views 5932

Replies 5

Hi there,

 

I am wondering if there is an ATO approved methodology for calculating work related internet usage?

 

For instance, lets say I have a total annual internet bill of $800.

How do I work out what percentage of the $800 can be claimed as a deduction?

 

"Keeping a diary" will only let me know which days I may have been on the internet for the purpose of generating income. Using a "data usage" estimate does not seem representative as watching 1 tv show on Netflix would likely use up more data than my entire annual work related data consumption yet I spend much more time browsing the web for work purposes than I do watch tv shows on netflix.

 

Any help with this problem of calculating internet usage as a deduction would be greatly appreciated.

 

Thank you.

008

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Most helpful response

ATO Certified Response

Devotee

Replies 0

Hi @008 and @macfanboy,
 
Thanks for posting! @macfanboy is pretty much right in that there's no ‘one way’ you must to calculate your internet/home phone deductions - everyone's situation is different, so each person may need to calculate their deductions differently.

 

You'll need to use a reasonable basis to calculate your deductions and keep records demonstrating how you came to your decision.

 

As usual, a four week period of measurement is an acceptable way to demonstrate how you worked out your yearly work use percentage. We doesn’t set out precise measurement guidelines, but do explain what are considered to be some reasonable ways to measure your work related use, depending on your own circumstances in Practice Statement PS LA 2001/6 Home office and electronic device expenses - see paragraph 9 in particular.

 

Home internet expenses are mostly private costs and therefore non-deductible, so you'd usually only be to claim in situations where you predominantly work from home. You'd need to demonstrate a significant component of work related internet use, as compared to private use to be eligible to claim the deduction.

 

Thanks, @AmandaE

 

5 REPLIES 5
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Taxicorn

Replies 4

It is one the hardest things to calculate as data can not be used as many houses have numerous devices constantly updating and stream simultaneously 24 hours a day.

 

Generally you would try and do it by time spent per day and assume a 16 hour day.

 

Normally someone who uses it for a few hours a day I would record 10-15%.

 

But I strongly agree that there is absolutely no definiative answer that makes sense and a clear outline needs to be updated by the ATO.

 

Also take into consideration 1 person, 1 device who uses it for 1 hour a day, are they not using it 100% of the time?

If not who else is?.....

 

This is the problem with many phone/internet plans with 'unlimited data', you can not base it on data downloaded.

Even if you could, with a limited plan, your estimate and the phone companys/ISP record of data will vary.

 

 

 

 

 

Highlighted

Newbie

Replies 0

Thank you for your response.

So essentially, there is no ATO approved methodology for calculating internet usage & costs for the purpose of claiming a deduction. However, internet costs associated with work purposes may be claimed as a deduction. This is a problem and I'm surprised that nobody has the answer given that internet costs are presumably deducted by many tax payers.
Highlighted

Newbie

Replies 2

Thank you for your response.

So essentially, there is no ATO approved methodology for calculating internet usage & costs for the purpose of claiming a deduction. However, internet costs associated with work purposes may be claimed as a deduction. This is a problem and I'm surprised that nobody has the answer given that internet costs are presumably deducted by many individuals.
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Taxicorn

Replies 1

Yes, until one of the moderators would like to correct me..

Most people guess..

 

Like I said, most people these days have an unlimited amount of internet. There are 24 hours in a day that it is paid for.

You could be using it for 4 hours (16.666%) how do you audit what/who used it and for what period whilst you were using it?

 

I normally just use 4 hours / 16 hours x (days used / 7 days in a week) x (weeks used / weeks in a year).

Disregarding other simultaneous usage.

 

 

 

 

Highlighted

Most helpful response

ATO Certified Response

Devotee

Replies 0

Hi @008 and @macfanboy,
 
Thanks for posting! @macfanboy is pretty much right in that there's no ‘one way’ you must to calculate your internet/home phone deductions - everyone's situation is different, so each person may need to calculate their deductions differently.

 

You'll need to use a reasonable basis to calculate your deductions and keep records demonstrating how you came to your decision.

 

As usual, a four week period of measurement is an acceptable way to demonstrate how you worked out your yearly work use percentage. We doesn’t set out precise measurement guidelines, but do explain what are considered to be some reasonable ways to measure your work related use, depending on your own circumstances in Practice Statement PS LA 2001/6 Home office and electronic device expenses - see paragraph 9 in particular.

 

Home internet expenses are mostly private costs and therefore non-deductible, so you'd usually only be to claim in situations where you predominantly work from home. You'd need to demonstrate a significant component of work related internet use, as compared to private use to be eligible to claim the deduction.

 

Thanks, @AmandaE