It’s tax time! More than ever, workers are trying to squeeze every dollar out of their tax returns to combat the rising cost of living.
Some office workers don’t pay much attention to their tax returns because they think there is very little they can claim for. Compared to many other occupations, this is true. But, if you take some time to think about the money you spent during the year to help with work and the locations you did that work, there may be some deductions you can claim.
Common Tax Deductions for Office Workers
Check out some of the most common deductions office workers make and potential pitfalls to look out for when making the claim.
Office Equipment
Workers are realising that having ergonomic equipment in the office isn’t very beneficial if you spend almost half of your week working from your laptop on a dining or lounge chair. This can increase the risk of a musculoskeletal injury in the short or long term.
If you bought ergonomic equipment during the year, you’ve invested in your health but also your tax return. Dig out the receipt for your ergonomic office chair, monitor risers, or sit-stand desk and claim the cost. If the equipment was $300 or less and you use it more than 50% of the time for work purposes, you can make an immediate deduction. You will need to satisfy the four test conditions. If the item was more than $300, you can claim a deduction for the decline in value over the item's effective life. Calculate your deduction for the decline in value of a depreciating asset using the depreciation and capital allowances tool.
Read more about office furniture and equipment deductions.
Working from Home
The pandemic has changed the way many office staff work. Instead of spending five days a week in the office pre-pandemic many employees like to break up the week working hybrid with some days in the office and some from home. Many workers are also working remotely full-time from home. For the time you spent working from home, you can claim 67 cents per hour.
The standard rate helps cover the cost of data and internet connection, mobile and phone usage, heating and cooling your study, lighting, electricity, computer consumables and stationery which includes any ergonomic equipment used in your work-from-home setup. Known as the fixed rate method, it’s quick and easy to claim, but you can’t claim a separate deduction for any of these items. The only deductions allowed separately are the depreciation on assets, repairs and maintenance of assets and cleaning if you have a dedicated home office. Alternatively, workers can use the actual cost method and claim deductions separately for the actual expenses incurred, if they prefer.
Read more about working from home deductions.
Donations
Most Australians make a few donations to charities and non-profit organisations throughout the year. Often, these small donations here and there add up, and over a year, you might find you have donated a few hundred dollars. Any donation of $2 or more can be claimed if you have a receipt.
The organisations you donate to must be classed as a deductible gift recipients (DGR). Some workers make gifts of cash, property, or shares to organisations. Gifts and donations can’t be claimed if there was a personal benefit or potential benefit such as a raffle, receiving a hat, being placed on a waiting list or attending a dinner. You can do an ABN Lookup to check if an organisation is a deductible gift recipient.
Read more about deductions for gifts and donations.
Union & Professional Association Fees
If you belong to a union or a professional organisation, you can claim the cost of those fees as a deduction.
Subscriptions
Some office workers subscribe to a journal or magazine that relates to their work. The cost of the subscription or individual publications can be claimed.
Mobile Phone Cost
If you aren’t making a working-from-home deduction and you use your personal mobile phone for work purposes, you can claim the work-related percentage of the phone costs.
Why Tax Deductions Matter
A tax deduction lowers your taxable income and reduces your tax liability. The lower your tax liability, the lower your tax bill. If you are a PAYG (Pay as you Go) employee, your deductions may bring down your tax liability to less than you paid in tax from your fortnightly salary. The Australian Tax Office (ATO) will then give you a refund on the extra tax you have paid.
Call Ergolink on (08) 9240 7066, visit our website, in person at our showroom, or contact us online for more information on office equipment that you can claim as a deduction.
Information contained in the article is a guide only and shouldn’t be taken as advice. Please see your accountant for individual tax advice.