Due to the COVID-19 pandemic, hundreds of thousands of workers have been required to work from home since mid-March. This results in an increase of home expenses during this time. People are paying more for their power, water bills, and so on, because they are home all the time.

To cover the extra expenses, the Australian Taxation Office (ATO) introduced something a bit different for the tax return for 2019-2020. If you do not normally work from home, you were not able to claim any deduction on your tax return in previous years, but you can do so this year. The ATO presented three different methods.

Shortcut method (only available for the period 1 March to 30 June 2020)

This method is the easiest way to claim the deduction. You only need to calculate how many hours you worked between 1 March and 30 June 2020, then times that number by 80 cents. This total will be the amount you can claim for deduction. The limitation is that it is only available for the 3 months.

Fixed rate method

You can claim a deduction of 52 cents for each hour you work from home for the work-related expenses you incur for additional running expenses for the whole year. However, you will need to have a dedicated working space, such as a room used only for work.

Actual cost method

You can claim the additional running costs you directly incur as a result of working from home. You will need to do a lot of calculation to figure out what the actual additional costs are, and you will need to keep all the records as well.

You can apply for a Tax Return from 1st July 2020; although the advice is to aim for later in July on account of the expected initial rush. For more details of what you can claim or what you cannot claim for the 2019-2020 Tax Return, visit ATO website.

An easy way  to lodge a tax return is through MyGov website. Choose Tax > Lodgement > Income Tax, then follow the instruction to complete. You can also go to an accountant to have it done for you. However, there will be some costs involved.