Despite the cost of living soaring ever higher and a Federal Budget that failed to actually do anything to help us pay for shit, everyone who works from home could lose hundreds of bucks from their next tax returns if the Australian Tax Office adopts new proposed changes.
COVID-19 cases are rising and a new wave is imminent, so why are we lowering incentives for people for to work from home rn?
New tax return shortcut provisions were introduced in 2020 to make claiming expenses related to working from home easier. Pandemic measures allowed people to claim an 80-cent per hour flat rate for the time spent working their job from home — rather than calculating the individual costs of every expense — and claim additional expenses like mobile bills on top.
Pre-COVID, that shortcut rate was just 52 cents per hour, so not as many people used it and instead had to do shitloads of paperwork at tax time.
The proposed changes would bring the rate down to 67 cents per hour.
The pandemic measures also still allowed people to claim mobile, stationary, internet and electricity costs *on top of* the hourly fixed rate, but the proposed changes would see everything bundled together.
If adopted, people who work from home will have with two options. One: you can either claim the “actual” expenses incurred, which requires keeping track of all your bills and breaking down your hours in the day. Or two: you can use the 67-cent shortcut and potentially lose money on separate claims on expenses such as stationery, communications and power.
Tax preparation company H&R Block estimated those who choose to use the shortcut option next year would lose about $600-700 in their next return if they work from home for half of their total work time. if it’s more, they’ll lose more.
“The new fixed rate includes costs such as mobile phones and stationery – meaning that many taxpayers could lose out,” H&R Block director of tax communications Mark Chapman told Guardian Australia.
“If you use your mobile phone extensively for work, you could potentially claim several hundred dollars just in mobile phone bills. [But] if you use the fixed rate method, you’ll lose this opportunity.
“If you don’t use the fixed rate method, you’ll be forced to claim actual costs for other working from home expenses (such as electricity and gas), which means that you need to keep lots of paperwork such as receipts [and] invoices.”
This is obviously a fucking pain in the ass.
“Claiming ‘actual costs’ isn’t feasible for many taxpayers — the record-keeping obligations are just too high,” Chapman said.
“Therefore, for millions of people, they will be forced to claim the 67-cent per hour fixed rate, which could result in a lower deduction and increased paperwork.”
If adopted, the new rules will backdate to include this entire financial year and come into effect for your tax return in July 2023. Well, thanks for nothing, y’all.