Tax deductions for Office chair costing more than $300

Lpadricko on 12/09/2020 - 09:38

Hopefully someone can help with my tax question

I bought an office chair I saw here for $320 or so, which will be used entirely for work from home purposes

It doesn't bother me so much how much I can claim on tax, but from a quick look it looks like because it's over $300 I can't claim it totally as a deduction in one financial year - I have to claim the depreciation over a long period of years and I'm lazy af so that's probably not going to happen. I saw one guy in the comments get the company to send an invoice for $299 with the difference as delivery. That seems like a hassle.

My question then, is can I just claim the $300 with the receipt for $320 and not claim any depreciation? Seems like a weird line for the ato to draw if not. Big furniture must have them by the balls!

Thanks!

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Comments

  • Elwes on 12/09/2020 - 09:50

    You can only claim office furniture if you're not claiming either of the flat hourly rates. Both the normal 52c/h and the special COVID rate include depreciation of office furniture.

    You can only claim depreciation of furniture if you itemise everything for your home office, e.g. the actual cost to heat and clean that space.

    • Elwes on 12/09/2020 - 09:53
      +1

      I'm not an accountant but I had the same plan as you:
      First I spent $400 on a decent (2nd hand) desk chair with the intention to claim it all on tax. Then I realised it was too expensive to claim in one go and I thought I'd have to depreciate it. Finally I realised I'd have to calculate too many other things for it to be worth it. I just sucked it up and accepted that the next few years of claiming at the 52c/h rate will eventually cover the cost of the chair.

    • Elwes on 12/09/2020 - 09:55

      'The shortcut method covers all of your work from home expenses, such as… the decline in value of equipment and furniture… If you use this method, you can't claim any other expenses for working from home.'
      https://www.ato.gov.au/individuals/income-and-deductions/ded…

    • padricko on 12/09/2020 - 11:45

      Thanks very much. I think using the hourly rate it's about $1000 a year anyway. That seems to cover the cost and then some so I guess it's not so bad. Thanks!

    • virhlpool on 13/09/2020 - 19:29

      The issue with the flat hourly rate is that you can claim only for the Covid period (and probably at a lesser rate for earlier months if at all one worked from home for a few hours pre-Covid), whereas in case of depreciation approach, you count whole year and not only a portion of the year or a portion of the price. This is my understanding.

    • virhlpool on 29/11/2020 - 04:20

      Can you claim furniture/ equipment worth less than $300 each separately if you are using 52c per day flat rate method?

      I believe you can't do this if you use 80c per day method. Is that right?

  • Seraphin7 on 12/09/2020 - 09:50
    +1

    The item will need to be depreciated.

    • OzFrugie on 14/09/2020 - 08:23

      Over how many years?

      • Seraphin7 on 14/09/2020 - 09:01

        You would need to check the ATO depreciation schedules.

  • vikvance on 12/09/2020 - 15:29

    The ATO has a tool to simply depreciation calculations.

    You can access it in your MyGov account using the link on this page:

    https://www.ato.gov.au/Calculators-and-tools/Depreciation-an…

  • CyberMurning on 12/09/2020 - 17:02

    The $300 requirements is per item, right? So if I have bought 6 small items each at $280 for example I still can claim them all in full at first year?

    • John Kimble on 12/09/2020 - 20:40
      +1

      Pretty sure it's sum of $300.

      https://www.ato.gov.au/individuals/income-and-deductions/rec…

      If your total claim for work-related expenses is more than $300, you must have written evidence to prove your claims.

      • bemybubble on 13/09/2020 - 16:50
        +1

        That’s for substantiation. ChiMot is referring to not depreciating items and claiming them outright for which you can so long as it’s <$300

        • CyberMurning on 13/09/2020 - 16:51

          Yeah. So 300 each item not total, right?

          • bemybubble on 13/09/2020 - 17:23

            @CyberMurning: Correct

          • virhlpool on 13/09/2020 - 19:32

            @CyberMurning: I am sure it's $300 total. You can't buy $2000 worth of stuff and expense it straight from income. Feel free to check with an accountant but I doubt if that's the case. 'Per item cost' doesn't really matter to them - it should to be total as far as I know.

            • bemybubble on 13/09/2020 - 19:56

              @virhlpool: Incorrect. It’s per item

            • Seraphin7 on 14/09/2020 - 10:21

              @virhlpool: It's per item. In theory you can buy as many items for $299 (or less) as you like and directly expense all of them. It would require evidence that they are each less than the threshold. You couldn't buy a "package" of 10 items for $2,990 and claim each individually … they would need to be separately itemised at $299 a piece.

              • virhlpool on 14/09/2020 - 10:25

                @Seraphin7: Thanks. Good to know.. and is there a rule around which items you can expense outright and which need to be depreciated over x number of years? e.g. table, chairs, monitor screen, etc.

                • Seraphin7 on 14/09/2020 - 11:07

                  @virhlpool: As an individual/personal taxpayer, you can expense any item under $300 immediately. All other items need to be expensed over their "useful life" as determined by the ATO depreciation tables. These tables are extraordinarily detailed so you would need to go through those to determine each specific case.

                  • virhlpool on 14/09/2020 - 13:00

                    @Seraphin7: Ok.. in that case, if someone spent on a couple of items just below $300, it will make more sense to not go for the flat rate (per day) approach since you can't expense the items if you go for the flat rate.. right?

                    • Seraphin7 on 14/09/2020 - 13:30

                      @virhlpool: You've got two options. Effectively keep an itemised list of everything that can be directly expensed, depreciation schedules, and other consumable items … or take the flat rate approach. Which of those is more lucrative will depend on your personal circumstances.

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