What Australians working from home who use their phones need to know about their tax returns

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What Australians working from home who use their phones need to know about their tax returns



Australians who use their mobile phones for work will no longer be able to conveniently claim back tax expenses when filing their returns this year.

With just nine days to go until the end of the financial year, accountants are warning people who work from home that they will be worse off if they get the $1,300 a year deduction.

The Low and Middle Income Tax Offset is also eliminated, which would stop middle and middle income earners from getting up to $1,500 in relief.

That means the typical worker stands to get about $3,000 less in relief than last year.

At a time when wages are falling in real terms due to high inflation, workers will get less back on their tax payments unless they undertake the time-consuming task of manually itemizing and documenting all their receipts.

Australians who use their mobile phones for work will no longer be able to conveniently claim tax refunds on their returns this year (stock image).

The Australian Taxation Office quietly changed the rules late last year so phone, internet, electricity and stationery costs can no longer be claimed as deductions over the allowed shortcut method.

This shortcut method allowed people to claim 80 cents an hour for all the time they worked from home – without producing receipts for phone, internet and electricity payments – but that method expired on June 30 last year.

But it wasn’t until November that the Tax Office announced that a new 67-cent-an-hour rate would be introduced and backdated to July 1, 2022.

Under the new rules, those who use this shortcut while filing their tax returns for the 2022-23 financial year will not be able to manually claim phone, internet, electricity and stationery expenses – and will have to choose one method or the other.

The new 67-cent-an-hour rule replaces both the flat 80-cent-an-hour rate and the lower 52-cent-an-hour rate for those who want to manually add up their phone and energy bills.

Mark Chapman, director of tax communications at H&R Block, said the new 67-cent-an-hour fixed rate would prevent professionals from manually claiming the cost of mobile and home landline phones, Internet connections, stationery, and electricity and gas bills.

He told Daily Mail Australia, ‘For the first time phone usage and internet costs are included in the fixed rate system.

The low and middle income tax offset is also eliminated, which would stop middle and middle income earners from getting relief of up to $1,500 (pictured is Treasurer Jim Chalmers with his wife).

‘Note that under the new rules, if you use your mobile phone for work purposes while you are out as well as at home, you can no longer claim a separate deduction for this use and still use the fixed-rate method.

What has changed this year?

Australians working from home will no longer be able to manually claim phone, internet and electricity above the 52-cent-per-hour rate or flat 80-cent-per-hour rate.

A new 67-cents-an-hour rate replaced both methods and is backdated to July 1, 2022.

This means people who want to claim work-related phone expenses cannot claim the shortcut rate.

Professionals working from home must also keep diary entries backdated to March 1, 2023. Four-week summaries are returned on July 1, 2022.

‘No additional deduction can be claimed for any expenditure covered by the rate if you use this method.

‘If you want to claim genuine use of your mobile phone – or home internet – you must claim using genuine methods for all work from home.’

H&R Block calculated that someone working from home for a year under the old 80-percent rule would typically receive a $1,536 deduction.

That rises to $2,618 under the intact 52-cent rule, as one can claim mobile phone, internet and stationery.

But under the new 67-cent-an-hour rule, that’s back to $1,286.40, because those items will no longer be claimable.

That equates to a difference of more than $1,300 a year.

Those working from home will also have to keep a daily diary from March 1, 2023.

The tax office will accept summaries for the four weeks from July 1 to February 28.

The low and middle income tax offset expired on June 30 last year meaning nothing for earners up to $126,000.

Those making $48,000 to $90,000 will not get the $1,500 refund they did last year.

This previously included a $1,080 and a one-time $420 cost-of-life bonus.

‘Many taxpayers don’t realize this until they come to file their tax return this year and they notice that the size of their refund has shrunk dramatically,’ Mr Chapman said.

The Australian Taxation Office quietly changed the rules late last year so phone, internet, electricity and stationery costs can no longer be claimed as deductions if someone wants to use the shortcut method (picture Assistant Commissioner Tim Loh)



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