In today’s modern workforce many people are required or choose to work from home. Given this, taxpayers are able to claim deductions for occupancy expenses. The ATO reports a large increase in claims in this area and it worthwhile noting the substantiation the ATO requires.
If you are working from home and claiming these expenses, the ATO accepts two forms of substantiation as follows:
- Records of total hours worked at home annually; or
- A four week diary that is representative of you usual pattern of working from home.
The diary is probably the more preferred choice for most taxpayer’s given it would be relatively less time consuming. However, for taxpayers who are making large claims or work at home constantly, the total annual hours would be a better form of substantiation.
Given the increase in claims in this area, the ATO have signalled they will be committing more resources to audits of taxpayers making this claim. If you are making these claims you would be well advised to keep one of the above forms of substantiation. If you wish to discuss the specifics of the record keeping requirement please contact our office.
This article appeared in our February 2020 newsletter and was written by Peter Gill
