EOFY: What can you claim when living in a share house?
Between lockdowns, hotspots and vaccination queues, you may not have had time to prepare for the end of the financial year. Luckily, we’ve got you covered with our tax hacks below.
Drakula & Co.
The good news is that, if you worked from home at all over the last 12 months, you may be able to claim some extra deductions on your tax statement this year. Here’s what to consider.
The home office space: utility bills and internet connections
If you worked from home over the last 12 months, you may be able to make some claims for your home office on your tax.
Critically, you’ll need records of the hours you worked from home, and the expenses themselves, to support your claims.
If you have that, the government offers three ways to calculate home office expenses:
- The Shortcut method, which lets you claim 80 cents for every hour you worked from home
- The Fixed Rate method, which lets you claim 52 cents for every hour
- The Actual Cost method, which may be useful if you have an area of your home dedicated to your home office, but it does require the most detailed records. Here, you can claim on the actual costs of depreciation of equipment, heating and cooling, and more.
For more information, see the ATO’s home office expenses page.
Keep in mind that, whatever method you use, if your working from home circumstances changed during the year — perhaps in response to lockdowns and then the lifting of restrictions — you’ll need separate records for each change. But if you keep your work schedule in a digital calendar and know when lockdowns were in your area, those records shouldn’t be too hard to find.
Deductions: supplies, education, and more
Of course, there’s a range of other deductions you can claim for the year, so long as you have the receipts.
We’re talking about things like uniform dry cleaning, office supplies, self-education expenses and purchases of new tools for work, including computers and phones, home office furniture, and so on. Make sure you claim the costs of any subscriptions you have to industry associations or professional development groups. And don’t forget the non-work deductions, like donations to charity, and personal superannuation contributions, too.
For more details on deductions, see Deductions you can claim at the ATO, but also have a look at the industry guide for tax information that relates to your specific work, and the Other work-related deductions info on the ATO website. Don’t miss a deduction!
What not to claim
There are a few things you can’t claim against your tax, including:
Coffee, tea, toilet paper — the costs of the kinds of household items employers usually provide in a workplace any cost that your employer pays on your behalf, or reimburses you for the depreciation of items like laptops that your employer provides to you children’s education costs, even if you had to spend money to buy a computer or desk to educate your kids at home through Covid lockdowns.
The problem with making claims on these items is that if you’re ever audited (and yes, it really does happen), you’ll need to repay the tax, and you may also be fined for making the error in the first place.
Bottom line: just don’t claim these costs as deductions.
What about your flatmate’s expenses?
Let’s say you weren’t working from home this year, but your flatmate was. And let’s imagine that they had the stereo and split system going all day, every day.
Can you claim the extra power expense on your tax return?
Sadly, no, you can’t. Tax deductions are about the costs you incurred as you earned your taxable income. Since your flatmate thrashing the split system wasn’t a factor in your income generation, it can’t be your tax deduction.
So, what to do? If you can tie the dates of your flatmate’s WFH to a corresponding increase in utility expenses, consider talking with them about paying a larger share of the relevant bills — or reimbursing the household for past bills that were off the charts — now that you know they can claim their portion of the cost as a deduction.
What about “offsets”?
Tax offsets can reduce the amount of tax you pay, and they depend on your circumstances. For example, there’s a “Beneficiary tax offset” for people who received certain government benefits during the year. There’s also a Private health insurance offset and rebate that apply if you earn over a certain amount and have private health insurance.
The important thing to know with these is: don’t worry. Once you include all the income and personal information the tax office asks for in the tax forms, the ATO will use it to calculate any offsets or rebates you should be receiving. So you don’t have to do anything to make this happen: offsets and rebates are applied automatically during your tax assessment.
What about super?
Look, we don’t want to sound like your mum (or your government) but you can claim personal super contributions as a tax deduction.
If you want to do this, you need to notify your super fund of your intention to claim the contribution as a deduction before you lodge your tax return. For more information on how to do this, see the Personal super page on the ATO site.
On the other hand, your after-tax super contributions (that is, the ones you pay from your after tax, take-home pay, and don’t claim as a deduction) can land you a government co-contribution if you earn under $53,847 for this financial year.
So, if you make an after-tax super contribution, the government will throw a few bucks your way too — up to $500 per person, per year. It’s a handy way to boost your super. Find out more about the super co-contribution at the ATO.
Other tax tips
The key with tax deductions is to keep records of the expenses, and, for those working intermittently from home, your WFH schedule.
Obviously, a decent digital calendar is useful to track your home-working movements. But for tracking deductions, try the ATO app. It has a myDeductions tool that helps you record and track all your deductions — work related and otherwise. You can download the information at tax time, or upload it straight to the ATO portal if you’re doing our tax online. Too easy!
Of course, if tax time is all too much, find yourself a good tax agent to help. Friends and family should be able to give you good recommendations, but one thing to look for is a tax agent who does a lot of work with people in a similar work situation to you. That way, they may be able to inform you (or jog your memory!) about deductions you might be overlooking. And that could mean a little extra in your pocket at the end of the day!
