The beginning of 2020 has had a profound effect on millions, forcing many to adjust to working from home for quite some time. As a result, many have bought new equipment to work remotely, laptops included. If you fall into this category, maybe you’ve pondered killing two birds with one stone by purchasing a gaming laptop.
This article has been sponsored by Nvidia.
The big question, of course, is can you claim a gaming laptop as a work expense? Like most information involving tax, the answers are rarely straightforward and often involve a lot of ifs and buts.
With items that are used for both work and personal purposes, it all comes down the proportion you actually use it for work. “You can only claim for the work-related use of the laptop so if you also use it privately, you’ll need to apportion your claim,” Mark Chapman, H&R Block’s Director of Tax Communications, told Kotaku Australia.
“For instance, if you use the laptop 50% for work and 50% for private use, you can only claim 50% of the cost.”
That’s the gist of it. But the ATO loves its rules, so here’s some other things you’ll need to keep in mind.
Make sure you keep invoices and records
The first record you’ll need to keep is obviously your receipt for proof of purchase, price and date of purchase.
You also need to keep a record of its work use over four weeks. It doesn’t matter if it’s physical or digital, it just needs to note the date, the time you started using the laptop for work purposes, the activities you did for said work and the time you stopped, factoring in any breaks you had throughout the day.
This record will indicate how much you use the laptop for work over a month which can then be used to estimate it over the period of time you’ve had it.
“You can’t claim a deduction if you are reimbursed by your employer,” Chapman said, so must bear the cost of the unit if you wish to make a claim.
Know which type of claim to make
There are a few different ways to claim a laptop for work. To make an outright claim, the item needs to be less than $300, which automatically rules out any gaming laptop.
“If the cost of the laptop or tablet is $300 or more, you need to claim the cost over two years, which is the effective life set for laptops and tablets by the ATO,” Chapman said. “In the first year, you can only claim for the period you owned the laptop – the later in the financial year you purchased it, the smaller the claim in year one.”
If you run a business, things could be a little different. “You can claim a deduction in the year of purchase for the whole cost of assets acquired up to $150,000 per asset (from 12 March 2020 to 30 June 2020, $30,000 before 12 March 2020). That should be more than enough to write off the cost of even the best laptop,” Chapman said.
He also says you can also claim other work-related tech costs such as software for the laptop, repairs and maintenance, a work-related portion of your internet bills if working from home, a work-related portion of utility bills if working from home and consumables like printer paper and ink, cleaning materials and so on.
Chapman also mentioned the ATO’s new “shortcut method” for those working from home, something which was introduced as a result of the current state of the world. It allows a claim rate of 80 cents per work hour from March 1, 2020, through to June 30, 2020, with the possibility of this period being extended based on when and how people return to work.
“You will need to keep a record of the number of hours you have worked from home,” he said. “If you use the 80 cents per hour method, you can make no other claims in relation to working from home. So, items like mobile phone and internet usage are included in the 80 cent rate.”
“Alternatively, you can claim the ATO’s existing flat-rate allowance for working from home of 52 cents per hour. This covers the extra costs of heating, cooling, lighting and the decline in value of furniture. All you need to do to claim this is to keep a diary – note the time you start work each day, the time you finish work each day and any breaks. You can then claim 52 cents per hour for each working hour.”
Don’t claim anything you can’t prove
Before you think of buying a laptop and simply saying it’s for work purposes, know that if the ATO smells anything suspicious about your claim, the onus is on you. If you can’t prove its a legitimate claim, you could face some pretty gnarly charges and fines.
In short, don’t risk it.
If you’re unsure about how or what exactly you can claim, Chapman suggests getting help from a professional. “Tax law is complex and many people either don’t claim for things they could have claimed for or claim for things they are not entitled to,” he said.
“Home-office claims, in particular, are routinely scrutinised by the ATO and with three different ways of making claims, a tax agent can guide you to the best result.”
That’s not to say you can’t buy a powerful gaming laptop to do non-design or graphics-heavy work. Plenty of people like the speeds that a gaming laptop provides even for basic tasks, so there’s nothing wrong with wanting the very best. The important thing is that you can justify its work usage.
If you’re after a gaming laptop that packs a punch, Nvidia’s GeForce RTX graphics processors will easily run the latest AAA games with stunning visuals, making them not only the perfect portable gaming device, but also a dream work device for creatives or anyone who appreciates lightning-fast computing.
Disclaimer: This article contains general information only and is not intended to be used as personal advice.