How much can your claim on tax working from home?by Arpit U. Tax Accountant
The pandemic has changed the entire working sector of the world. The economic crisis has led to less demand for products, and thousands of employees have lost their jobs. Nations have imposed the lockdown in their entire states to mitigate the spread, and these restrictions have made the IT firm employees work from their homes. In short, all the pre-calculations of 2020 have now just become speculation.
The half-year has passed in the battle of Covid-19, but those working also need to think about the tax returns and reimbursement from the company or consult a tax accountant. While working at home, we sometimes wonder how much we can claim on tax. But don’t worry; you have landed on the right page.
We will sort out your all hazy thoughts about reimbursement. And also tell you about the best ways to calculate your tax deductions-
Home office deduction
Due to the pandemic crisis, a massive number of employees is now working from home, and there is no complete idea when the condition will be normalized. So, while at home, you can claim a home office tax deduction from your firm and consult to your tax accountant for advice. Indeed, these criteria can be considered by the company if you are using your home for your work. Property taxes, mortgage interest, homeowner’s insurance, and other utilities can be listed for home-related expenses.
Travel and mileage track
It is yet another very crucial aspect of claiming a tax deduction from your company. If you are working at home and using your personal vehicle and paying bills for travel expenses, you can undoubtedly claim for the tax deduction. However, it would be best if you were accurate with your mileage records and travel-related proper expenditures.
While working at home, you can also claim for the running expenses. If you are using your home genuinely for your work-related activities, you can claim running costs such as electricity usage, internet expenses, etc. Mainly there are three ways to calculate your running expenses based on the information-
The Shortcut method for the calculation of the running expense is considered as the most-simplest one. In the shortcut method, you can claim 80 cents per hour while working at home, and this will include all your expenses like electricity usage, internet, tech, cleaning, etc. However, you need to have an accurate record of your work hours while claiming for this calculation. And it would be better for you if you talk to your tax accountant about your claims.
In the fixed-rate method, you can claim 52 cents per working hour. It covers your all uses such as electricity, internet, phone expenses, tech consumables, computers, and your main business operating devices such as laptops. However, you need to keep records of your work, as we mentioned in the shortcut method. A timesheet or dairy can be used as proof to show.
Actual Cost method
The actual cost method is the most precise yet time-consuming. In this method, you need to provide pieces of evidence for each claim on tax deduction. These include the number of recording working hours, determining the units of electricity consumed, and keeping all records of work-related expenses such as cleaning, assets, and any repair.
While working from home, you need to have specific methods and expenses that can be covered in tax deduction to manage your all home budget. These were the claims and practices that can be beneficial for you to make a tax deduction claim from your company, and you can also talk to your tax accountant about making claims.
Created on Jul 30th 2020 23:52. Viewed 320 times.