The WFH Reality Check: Getting Deductions Right

The way Australians work has changed, and so have the rules for claiming expenses. For the financial year, the ATO is keeping a close eye on working-from-home (WFH) deductions. It’s easy to miss out or, worse, over-claim.

You currently have a couple of options: using the fixed rate method (which has specific requirements for hours and records) or the actual cost method. With the fixed rate, you’ll need records showing the total hours worked from home throughout the year and proof of every expense used in the calculation (like internet or phone bills). If you opt for the actual cost method, you must meticulously track everything, from the decline in value of your office equipment to the percentage of utility bills used for work. A quick chat with your Factor1 advisor can save you a headache and ensure you use the method that delivers the best, compliant return.

Investing in Your Skills: Self-Education Expenses

A common query we hear is: “Can I claim the cost of my university course or industry certification?” The answer often lies in whether the expense directly relates to earning your current income.

Generally, you can claim expenses like course fees, textbooks, stationery, and travel to attend courses if the self-education:

  • Maintains or improves the skills or knowledge you use in your current employment.
  • Results in an increase in your income from your current employment.

However, you cannot claim if the study merely allows you to open up a new income stream or pursue a different career path. This is a complex area, so always keep detailed receipts and be ready to justify the direct link between the study and your income-earning activities.

Instant Asset Write-Offs: The Small Business Boost

While the rules for the instant asset write-off have changed frequently, they remain a vital tool for Australian small businesses looking to reduce their taxable income.

In recent years, the thresholds and eligibility criteria have seen adjustments. This deduction allows eligible businesses to immediately write off the full cost of assets (like a new laptop, machinery, or office furniture) used in the business, up to a specific limit. It’s crucial that you understand the applicable threshold for the current financial year and that the asset is both first used or installed ready for use in that financial year. Relying on an accurate, up-to-date asset register is non-negotiable for claiming this deduction correctly.