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The ATO has updated the hourly rate taxpayers can use to determine deductions for home office expenses from 45 cents to 52 cents per hour for individual taxpayers, effective 1 July 2018 (i.e.. from the 2019 income year)

According to the ATO’s recently updated PS LA 2001/16, individual taxpayers who claim deductions for either wok or business-related home office running expenses may either:

· Claim a deduction for the actual expenses

· Incurred; or

· Calculate the running expenses at the rate

· 52 cents per hour

Taxpayers who use the rate per hour method to claim a deduction for home office running expenses only need to keep a record to show how many hours they work from home.

This reduced substantiation requirement can be recorded either:

· During the course of the income year; or alternatively

· They can keep a representative four-week diary (where their work from home hours are regular and constant)

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