• Millions of Work from Homers (WFH) could be out pocket thanks to this ATO rule change.
• $1300 a year could be a typical loss for a taxpayer because of the rule change
• Under previous Tax Office rules, taxpayers could choose to use a fixed-rate claim of 52¢ an hour for working from home-related deductions, a special COVID-19 shortcut, or claim the actual cost of items such as technology and office equipment. (AFR)
• Or you could claim the actual cost.
• 2 million Australians claimed deductions for working-from-home expenses before the pandemic but that figure soared to 5 million during COVID-19 restrictions!
• The decline in value of any work-related depreciating assets used at home now needs to be separately calculated, along with any other expenses not covered by the rate per hour method.
• Each year, eight-and-a-half million Australians claim about $20 billion worth of work-related expenses, many of which relate to working from home. The average claim each year is about $3,000.
• Claim more and you could be investigated.
• The new ATO demand: Records of actual hours worked will be expected to be kept.
• The 52c an hour fixed-claim has gone to 67c but the ATO has put limits on what expenses taxpayers can claim.
• Under the current 52-cents-per-hour fixed-rate method, items like work-related mobile and home telephone expenses, internet expenses, stationery, and the decline in value of a computer, laptop or similar device can be claimed as a separate deduction.
• But the new 67-cent rate considers a taxpayer's total deductible expenses for their electricity and gas, phone usage (mobile and home), internet, stationery and computer consumables.
• And if you go for the 67-cent method — there will be no other tax deduction claims possible for these types of expenses.
• However, there are items that still can be claimed separately — the include decline in value of assets used while working from home, such as computers and office furniture, repairs and maintenance of these assets and costs associated with cleaning a dedicated home office.
• My tip? Make sure you talk to an accountant if you are claiming a lot of expenses as a tax deduction.
Stocks fell Thursday after another hot inflation report, and a decline in jobless claims, showed the economy is holding up amid the Federal Reserve’s rate hikes.
The new data comes after January’s consumer price index and retail sales report were both higher than expected, suggesting that the Fed may have further to go in its efforts to tame inflation. (CNBC)
Comments from St. Louis Federal Reserve President James Bullard that he’d advocated for a 50 basis-point interest rate hike at the last meeting and could see a hike of that magnitude in March also weighed on equities. Cleveland Fed President Loretta Mester also said she supported a larger hike.
Bottom line for shares? Stocks will be under pressure on Wall Street until the Yanks see some convincing economic data that says inflation is falling fast enough to stop the Fed raising interest rates.