With tax time fast approaching, CPA Australia suggests taking a “yeah, nah” approach to claiming working from home (WFH) expenses in this year’s tax return. “When it comes to claiming deductions, if you think it’s a ‘yeah, nah’ situation, the answer is probably ‘nah’,” says Elinor Kasapidis, CPA Australia’s resident tax expert.
Here are six examples of “yeah, nah” deductions that Elinor says won’t fly with the ATO:
1. Doggie daycare. Elinor says, “You went back to the office and Rover destroyed the couch, so now he’s in doggie daycare. Yes, we saw the Instagram post; no, the cost can’t be deducted.”
2. Your new WFH wardrobe. “Trackie-daks and Ugg boots may be the new black when it comes to ‘working from home’ wear, but they’re not a ‘uniform’ for tax purposes and can’t be deducted.”
3. Zoom-ready home décor. “Agreed, your Zoom background is ‘amaze-balls’, but those carefully curated books, plants and throw rugs aren’t deductible.”
4. That gorgeous Chanel tote bag. “Even though your handbag is big enough to hold a laptop, if it’s not required for carrying work items, it’s a firm ‘no’ as a tax deduction.”
5. Wellness activities. “Just because your workplace runs a hot yoga class on ‘Wellness Fridays’ doesn’t mean your downward dog is deductible when working from home.”
6. Tim tams and other 3pm pick me ups. “Sometimes we all need a Tim Tam or 12 to get through the workday. Your boss may provide bikkies at work, but that doesn’t mean you can claim them when you’re working from home.”
Elinor says there are always exceptions to the rule, but in most cases, it’s not you! “If you’re still keen to argue the point after applying a ‘yeah, nah’ approach, I recommend you run it past your tax agent before putting your head in the lion’s mouth by lodging your return.
“A CPA Australia tax agent will weed out claims which aren’t legit, and probably find some deductions you are entitled to but weren’t aware of. Accountants don’t want to be the fun police, quite the opposite. They’re trying to stop you from getting on the wrong side of the ATO, and make sure you get your maximum refund.”
For more information about what employees can and can’t claim, visit our Tax Tips page.