FINANCIAL CONNECTION
KATE _ SEPT2004 / GETTYIMAGS. COM. AU
PREPARING FOR TAX TIME
Make the best of this tax year with expert tips and advice.
BY ZILLA EFRAT
As the end of the tax year fast approaches, good record keeping for tax purposes has never been more important, especially because COVID-19 has resulted in many of us working more from home.
Tax-wise, as an employee or business owner, you can claim for expenses incurred by working from home in two ways: calculating the‘ actual cost’ or choosing a‘ fixed rate’ of 67 cents for each hour worked at home. Both require good record keeping for each of your expenses, says Maurice Vasin, an accountant and tax practitioner at Sydney-based Vasin Accountants.
But he notes that many bills include charges for both work and private use. So, if you’ re going the‘ actual cost’ route, you’ ll also have to prove how much of the bill was for work and how you worked that out.“ For example, for the phone, you’ ll have to analyse four weeks of the bill to see how many calls were for work,” he says.“ For rent or energy, you’ ll have to assess what percentage of your home is used to earn your income and your claim will be that percentage of the bill.”
According to Vasin, the‘ fixed rate’ method is easier, but you must keep records to prove you’ ve worked the actual hours. He says the Australian Taxation Office( ATO) no longer accepts estimates or a four-week representative diary for hours worked from home after 28 February 2023. Instead, you must now record every hour you’ ve worked at home all year in some way – for example, in your diary, a timesheet or a roster. >
COSTCO CONNECTION MAY / JUN 2023 | 15