Rands Tax & Business Consultants

2024 Home Office Expense Changes

Understanding the rules for claiming home office expenses is crucial for maximizing your tax deductions. At Rands Tax & Business Consultants, a tax Agent in Berwick, we are here to guide you through these rules and help you make the most of your tax return.

Personal Super Contributions

The Australian Tax Office (ATO) has set out specific guidelines on how home office expenses can be claimed in your 2024 tax return. These guidelines aim to streamline the process while ensuring accurate record-keeping

Detailed Home Office Expense Rules

1. Current Rate Per Hour

  • The rate per hour for claiming home office expenses is set at 67 cents. .
  • There is no requirement for a designated working area, making it easier for many taxpayers to claim this deduction

2.  Absorbed Deductions

  • The 67 cents per hour rate includes several deductions that were previously claimed separately, such as:
    • Internet expenses
    • Home and mobile phone expenses
    • Electricity and gas used for heating, cooling, and lighting
    • Stationery and computer consumables

While this approach simplifies the claiming process, it may result in a smaller overall deduction for many taxpayers.

Remaining Eligible Deductions

Despite the new rules, there are still some expenses you can claim in addition to the 67 cents per hour rate: - ''Depreciation of assets over $300:''This includes office furniture, computers, and mobile phones. - ''Work-related purchases under $300:'' Items such as desk chairs and monitors. - ''Cleaning and repair costs:'' Expenses for cleaning your home office and repairing office furniture.

Record Keeping Requirements

To comply with the new rules, maintaining accurate records is essential. You must keep detailed records of the actual hours worked from home and the associated running expenses. Acceptable methods for tracking work hours include timesheets, rosters, employer system logs, time-tracking apps, or regularly updated diaries.

For home office running expenses, keep all relevant bills and receipts, including power, gas, home phone, mobile, and internet expenses. If these bills are not in your name, provide evidence of shared expenses, such as joint credit card statements or property lease agreements.

Choosing the Right Deduction Method

1. Cents Per Hour Method

  • This simplified method includes most common deductions and is straightforward to use.

2. Actual Cost Method

  • This method allows you to claim each expense individually, which may lead to a larger deduction.
  • Requires detailed records of each expense and how it relates to your work.

Potential Financial Impact

The changes could mean a smaller refund for some taxpayers. Historically, claiming each expense separately often resulted in a larger deduction. However, the ATO's new fixed rate might simplify the process for others.

To determine the best method for your situation, consider your typical work-from-home expenses. Our experts at Rands Tax & Business Consultants, serving tax payers in Berwick, Narre Warren, Narre Warren North, Officer, Beaconsfield, Pakenham, Hampton Park, Cranbourne North and Clyde North, can help you choose the method that maximizes your tax return.

How Rands Tax & Business Consultants Can Help

Our team specializes in navigating tax changes and ensuring you get the most from your tax return. We offer personalized advice and assistance with record keeping to help you comply with the new requirements.

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