Working from home: the method matters more than the hours.

The working from home rules have changed several times. A return prepared on last year's habits can quietly use the wrong method, or double-claim items that are already included in an hourly rate.

A reviewer checks three things: which method was used, what records support the hours and whether any equipment was claimed separately when it should not have been, or not claimed when it could have been.

If you worked from home in more than one income year, it is worth checking each year separately. The rules, the rate and the record-keeping requirements have not stayed the same and a return that was right for one year can be wrong for the next.

The methods, in plain terms

Broadly there are two ways to claim. One applies a set rate to the hours you worked from home and bundles a list of running costs into that rate. The other claims the actual costs, apportioned between work and private use and needs the records to back each one. They produce different figures for the same year, they require different evidence and which one was used on your return decides everything else.

The double-claim trap

Under the rate method, certain running costs are already inside the rate. Claiming them again as separate items is the single most common error a reviewer finds and it is an error that can cut both ways: it overstates one year and, once someone notices, it tends to make people under-claim the next. Equipment and furniture sit outside the rate and are claimed separately, over time where the cost is above the threshold.

Records and how the requirement has moved

For some years an estimate of typical hours was acceptable. For others, a record of the actual hours worked is required, kept as they happen. A return that used a reasonable estimate in a year that required a record is exposed and one that skipped the claim because keeping records seemed too hard may have left something on the table. The agent checks what the rules were for the year in question and what you actually have.

What to do if you worked from home in more than one year

Treat each year on its own. Tell us the income years you have lodged and roughly how much you worked from home in each. A registered tax agent reviews the returns, free and tells you in writing whether an amendment is worth lodging for any of them. Refunds are not guaranteed and nothing is lodged without your written approval.

General information only. It does not take account of your circumstances and is not tax advice. Untax is a marketing and referral service and is not a registered tax agent.