Since the Work-From-Home prospect became so popular due to the Covid-19 pandemic, you might be wondering if you can claim your computer repairs on tax. With so many of us working remotely, our needs for hardware such as computers and laptops have increased as well as our home internet usage.
So now you wonder, can I claim computer repairs on tax? The ATO states that ‘you can claim a tax deduction for expenses relating to repairs, maintenance or replacement of machinery, tools or premises you use to produce business income, as long as the expenses are not capital expenses. A capital expense is money spent to purchase assets like plant and equipment.’
Capital expenses include:
- repairs made to machinery, tools or property immediately after you purchase or acquire them – this is because the price you paid reflects the item’s condition.
You can generally claim a deduction for capital expenses under the:
- general depreciation provisions – for items
Discussing with your accountant at tax time will clarify the amount you can claim for repairs and maintenance, just make sure you keep your receipts from your IT professional!
Can I claim my laptop or computer on Tax?
If you are looking to claim your own personal computer or laptop as a tax deduction, you can claim the year-by-year depreciation. You must, however, use your laptop or computer for work, all or part of the time.
If you have purchased a new laptop or computer in the current financial year, you can claim the cost of the item also.
If the tool or equipment cost you $300 or less, you can claim a deduction for the full amount in the year you buy it, if:
- you use it mainly for work purposes
- it’s not part of a set that together costs more than $300.
You can claim a deduction for the cost over the life of the item (that is, decline in value), if the tool or equipment:
- cost more than $300
- is part of a set that together cost more than $300.
Your tax professional can help you work out the rate of depreciation you can claim over the life of the asset.
How do I work out my depreciation percentage?
You should keep a diary of usage for 4 weeks, and make a note of the time spent on your computer for work and personal use. You can then work out what percentage of your computer use is for work.
You’re able to claim a percentage of your laptop or computer by claiming the ‘business use percentage’.
To start with, you need the following records:
- Proof of purchase for the computer (or laptop) plus the software you use for work.
- The purchase date.
- The business use percentage.
You can also use this depreciation and capital allowances tool from the ATO to work out your percentages
Can I claim my internet usage on Tax?
You can also claim a tax deduction for internet usage. As is the same with claiming computers and laptops, you need to determine what percentage of your internet use is for work purposes. You should then be able to claim that percentage of your annual internet bill as a tax deduction.
All of these examples are for information purposes only, you should refer to your accountant at tax time to ensure you aren’t overclaiming or underclaiming.
Information for this article has been sourced from H&R Block, eTax Accountants and the ATO