2020/21 Tax time tip – Claiming a deduction for phone expenses

Using your phone for work purposes may allow you to claim a tax deduction if you paid the costs and you have records to support your claim.

The key things you need to consider are:

  • Determining how much of the costs relate to private usage of the phone and how much relates to work related usage
  • You can only claim expenses for work related usage, not private usage
  • If your claim is less than $50 you can claim $0.25 per call from your home phone, $0.75 per call from your mobile and $0.10 per text message that is work related
  • If your claim is more than $50 you will need to keep records for a 4 week period to decide a reasonable percentage of your phone costs that are work related and the amount of your deduction
  • If you purchase a phone and use it for work you may also be able to claim a deduction for a percentage of its cost

The Australian Taxation Office (ATO) has also announced special “short cut method” for claiming a tax deduction for working from home expenses due to COVID-19, If you use this method it includes phone expenses so you cannot also claim a specific deduction for phone expenses. If you use the other methods for calculating deductible work from home expenses, known as the “fixed rate method” and the “actual cost method”, you can claim separate amounts for phone expenses.

Details of the special arrangements are available in this article or from the ATO.

MoneyBrilliant can help you track your phone expenses as well as other tax-deductible expenses so you claim everything you are entitled to.

You can get more information on claiming deductions for the phones and phone calls from the ATO website or your tax adviser.

This summary has been prepared by MoneyBrilliant Pty Ltd (AFSL 492711). The information in this summary is of a factual nature only. We are not suggesting or recommending that you take any particular course of action in relation to any financial product or service. It does not take into account your personal circumstances or objectives. If you need financial advice or taxation advice you should seek advice from a licensed financial adviser or tax agent. You may also be able to access additional information from the websites of the Australian Securities and Investment Commission (ASIC) or the Australian Taxation Office.

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