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Work Related Expenses 2020 – complete with new traps for the unwary

The year 2020 has been nothing but a big bunch of surprises for many of us.  Getting this years tax return completed will be no different. – So what to look out for?


Laundry for 2020

We have been able to claim $1 per full load of uniforms with a maximum of $150 claimed for a year – for a number of years now. 

Trap:  If your business had a shut down, you took holidays, or worked from home instead – you cannot reasonably expect to claim washing loads for those weeks.  The ATO is expecting a large % of tax payers will not be eligible for the full $150 claim.

 

Home Office Expenses – now a jungle

Trap 1:  A quick list of what you cannot claim first:

  • tea, coffee and associated expenses such as toilet paper cannot be claimed if working from home due to COVID 19.
  • The cost of setting up your children for online learning from home due to COVID19 is also not claimable.  This includes ipads, computers and desks for them.
  • If you have paid for and been reimbursed for expenses such as paper, ink cartridges or a laptop by your employer you cannot claim them on your return.

The 3 methods: 52c an hour, 80c an hour and actual cost

To be completely frank – each of these methods are VERY different to each other.  Depending on how your expenses work out – (eg if  you have a large phone bill vs a huge electricity bill) you need to approach this very carefully.  The best method for you might well surprise.

80c an hour method

  • Its limited to hours in a diary from 1st March 2020 to 30th September 2020.
  • Should not be used for incidental hours of checking emails and taking calls – should be used for when you are committed to working in an home office carrying out your normal work duties.
  • Unlike other methods it covers ALL working from home expenses so you cannot claim anything else associated with working from home.
  • Eg: includes – telephone, internet, computer expenses, desks, cleaning, heating such as gas and electricity all of which you cannot claim if you use this method.
  • If you used your home office before the 1st of March 2020 then you can use one of the other methods for the other part of the year.

52c an hour method

  • This hourly rate can either actual hours recorded for the year – or be based on a 4 week period to show ‘pattern’ of expected hours.
  • You need to have a dedicated work area that is not used for other things – eg: the dining room table will not suffice.
  • It only covers off general heating costs associated so you can claim additional costs such as
    • telephone expenses
    • internet expenses
    • cost of furniture and equipment such as desks and computers
    • ink cartridges, paper, pens and pencils.

Actual costs

  • This method can be more labor intensive to work out but can also give the best outcomes in some circumstances.
  • To claim heating you need to have a dedicated area in the house
    • You examine your electricity bill for the average cost of heating per hour as well as average units per hour used.
    • Apply the above to the number of hours you have diarised for work related use in the office
  • To claim cleaning – you need to work out the % floor area of the office and use that as a basis for work related cleaning costs
  • When you claim the phone, internet and computer use – you need to examine and remove costs associated with personal use.

Trap 2:  As can be seen by the above – some of the major factors to consider when claiming are

  • size of the heating bill – if large you might find the actual cost is most beneficial
  • size of the phone/internet bill – if large – then 52c rate might be beneficial
  • If you don’t have a dedicated office space then the 80c rate might be better over all.

Claiming your car in 2020

traps:  Lets be clear about what you cannot claim

  • you cannot claim your car use if you pick up the mail on the way to work.  Minor work related tasks don’t count.
  • It doesn’t matter if you have to drive from home to work on more than one occasion in a day.
  • It doesn’t matter if there is no public transport near your home so you have to take private transport
  • It doesn’t matter if you finish or start at hours where no public transport is running.
  • It doesn’t matter if you are on call – and get called in, the transport is still not claimable.
  • It doesn’t matter if your primary office during COVID 19 is your home based office  – this does not trigger the ability to claim your car use.