How to claim home internet as a tax deduction.
E-tax is such a great program and I can’t recommend it enough for anyone with a fairly basic tax return. Unfortunately, there are many people lodging their tax online that are missing tax deductions and basically ripping themselves off. There is no point lodging your own tax return for nothing if you are missing important tax deductions and costing yourself money.
Internet, laptops and iPads are one of the most common tax deductions missed by those lodging their own tax online.
Do you do any of the following at home:
- Study a course that is related to your job
- Professional development or research related to your job
- Work from home on certain days or take work home at night.
- Do management related duties such as doing rosters at home.
If you do, then you may be entitled to claim your laptop, iPad and internet costs as a tax deduction.
What records will you need to keep?
If you are claiming home internet, you will need to keep a diary for 4 weeks showing the hours you used your internet for work/study and the hours you used the internet for private purposes. Once you have worked out the work related percentage over the 4 weeks, you can claim this percentage of your internet as a tax deduction for the rest of the year.
You will also need to keep your internet bills for the entire year. I suggest getting your internet provider to email your monthly statements rather than receiving them through the mail. That way you can save down the statement each month into an electronic file called ‘Tax Records’.
Laptop or iPad
If you are claiming your laptop or iPad, then you will need to keep a 4 week diary showing the hours you used it for work/study, and the hours you used it for private purposes. Once you have worked out the work related percentage over the 4 weeks, you can claim this percentage of your laptop/iPad as a tax deduction
You will also need to keep the invoice with proof of purchase of your laptop or iPad. I suggest asking the store where you made your purchase to email you a copy of your invoice. Most are happy to do this if you ask them at the time of purchase. That way you can save it down into a Tax Records folder.
Note that if your iPad or laptop cost over $300 then you will need to depreciate it. The Australian Taxation Office has a great online calculator for working out depreciation. You can check it out here. It’s really hard to find if you don’t know the link so I suggest you go there now and add the link to your favourites.
If you would like to read what the tax office says about claiming internet you can check it out here.
If you want to read what the tax office says about invoices and the details they will be looking for in the event of an audit you can read it here.
My Final Word
Lastly, if you think that you might be entitled to claim your laptop or internet as a tax deduction, then I suggest you get in contact with your accountant. Not only do most accountants have free spreadsheets that you can use to record your 4 week diary usage, but they will also be able to give advice on your eligibility to claim a tax deduction depending on your circumstances. If you lodge your tax online and can’t afford an accountant, then I suggest you phone the tax office and ask for some further information on your eligibility to claim, and how you should set out your 4 week diary.
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