The ATO has issued an information sheet setting out new requirements for taxpayers claiming phone and internet expenses.
Where taxpayers use their own phone or internet for work purposes and paid these costs themselves, they may be able to claim a deduction for the cost, providing they have the necessary records to substantiate those claims.
Starting from next year (2016), all taxpayers making a claim for phone and internet expenses will need to keep a 4 week diary every year.
In order to make a claim that is more than $50, the diary will include:
If a taxpayer is making a claim of less that $50 they may claim on the following basis:
Taxpayers who receive and itemised bill will need to determine their work related calls over a 4 week period on a reasonable basis and then apply that percentage for the full year. A reasonable basis includes:
Where taxpayers do not have an itemised bill they should keep a record of all their calls over a 4 week period and they apply the reasons basis to their claim.
Where phone and internet have been bundled and taxpayers wish to make a claim for one or more of these services they need to apportion their costs based on the usage of each service. Taxpayers will need to identify their work related usage over a 4 week period for each service and they apply the reasonable basis to calculate their claim.
Reasonable basis can include:
Taxpayer monthly home phone and internet bundle cost $100 comprising $40 phone and $60 internet and a mobile plan of $80. Based on taxpayers 4 week diary 20% of mobile usage and 10% of internet usage relates to work while the home phone was not used for work. Taxpayer could make a claim of:
Internet 10% x $60 x 11 months (allowing 1 month leave) =$66
Mobile 20% x $80 x 11 months =$176
Total claim =$242