What Australians working from home who use their phone need to know when it comes to tax return

Australians who use their mobile phones for work will no longer be able to easily reclaim the costs on their tax returns this year.

With the fiscal year end just nine days away, accountants are warning those who work from home to be prepared to be $1,300 a year worse off when it comes to getting deductions under new tax rules.

The low- and middle-income tax offset has also been abolished, preventing middle- and middle-income earners from getting up to $1,500 in relief.

That means the typical working Australian will receive nearly $3,000 less in aid during a cost-of-living crisis compared to last year.

With wages failing to keep up with inflation, Australians hoping to maximize their tax refunds will now have to spend more time filing their returns – manually adding up their receipts – if they don’t opt ​​for the new, less generous shortcut method.

The Australian tax office quietly changed the rules late last year so that telephone, internet, electricity and office expenses can no longer be claimed as deductions for someone using an approved shortcut method.

The easy method of letting professionals claim 80 cents an hour for all the time they worked from home — without having to submit phone, internet, and electricity bills — expired on June 30 last year.

But it wasn’t until November that the IRS announced that a new rate of 67 cents per hour would be introduced, retroactive to July 1, 2022.

Under this new rule, those who use this shortcut when filing their tax returns for fiscal year 2022-23 will not be able to manually declare telephone, internet, electricity and office expenses.

Previously, home-based professionals could claim a flat rate of 52 cents per hour and a percentage of telecommunications and home office costs, based on actual costs.

The new 67 cents per hour rule replaced both the flat rate of 80 cents per hour and the lower rate of 52 cents per hour for those who wanted to add up their phone and utility bills manually — which is set to charge late-home professionals $1,300 per hour. years worse off.

Mark Chapman, H&R Block’s director of tax communications, said the new flat rate of 67 cents per hour would deter professionals from manually declaring mobile and landline phone, internet connection, stationery, and electricity and gas bills.

“For the first time, phone usage and internet charges are included in the flat rate method,” he told Daily Mail Australia.

The low and middle income tax offset has also been abolished, preventing middle and middle income earners from getting up to $1,500 in relief (pictured is treasurer Jim Chalmers with his wife)

‘Note: if you use your mobile phone both outside the home and at home for work, you can no longer request a separate deduction for this use and you can still use the flat-rate method.

“If you use this method, you can’t take an additional deduction for costs that fall under the rate.”

Those who want to declare their work-related telephone costs can no longer do so on top of the old rate of 52 cents per hour, which means that they are worse off.

“These were previously excluded from the flat rate method, allowing a separate deduction to be claimed for these expenses,” Mr Chapman said.

‘If you want to declare actual use of your mobile phone – or internet at home – you must declare all home work costs via the actual method.’

H&R Block calculated that under the old 80-cent rule, someone who works from home for a year would normally get a deduction of $1,536.

This rose to $2,618 under the abolished 52-cent rule, as someone could manually claim cell phone, internet, and stationery.

But under the new 67 cents an hour rule, that dropped to $1,286.40, as these items would no longer be due.

That equates to a difference of more than $1,300 per year, comparing the new method to the existing 52-cent method.

Since March 1, 2023, home workers must also keep a diary of all home working days.

The IRS will accept a four-week summary from July 1 to February 28.

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

Those who make $48,000 to $90,000 will not get back $1,500 like they did last year.

That previously included the $1,080 and the $420 one-time bonus toward living expenses.

“Many taxpayers won’t act on that until they come to file this year’s tax returns and find that the size of their refund has shrunk dramatically,” Chapman said.

The Australian tax office quietly changed the rules late last year so that telephone, internet, electricity and office supplies costs can no longer be claimed as deductions if someone wants to use a shorter method (photo shows Assistant Commissioner Tim Loh)