Tax Deduction for Computer or Laptop?
Tax Return - Tax Deduction for Computer or Laptop?

Tax Deduction for Computer or Laptop?

Published on January 1, 2018
Sam Inayat - Bookkeeping, Tax return and BAS expert

Senior Accountant at Top Accountants

Can I claim my computer as tax deduction? The answer is “YES”. However, you must genuinely use your computer for work purpose to be eligible to claim a tax deduction.

Example: Often people work after hours at home or spend a portion of their week working remotely. In both cases they use their own equipment for such work. If this sounds like you, it’s likely that you could claim your computer as a tax deduction.

In this article we will cover following computer tax deduction questions:

  1. How do I claim a computer as a tax deduction?
  2. Can I claim a one off tax deduction or do you need to claim it as depreciation?
  3. What if I have hired/leased a computer?
  4. How can you prove it?
  5. Can I claim a deduction for internet usage?

1. How do I claim a computer as a tax deduction?

The most important thing to note here is that you are onlyeligible to claim a ‘business use percentage’ of your computer as a tax deduction. To begin with, you need the following records:

  1. Proof of purchase for the computer (or laptop)
  2. The purchase date
  3. The business use percentage
  4. Working out your business use percentage (work purpose usage)

ATO require you to keep a diary of all your computer usage for a minimum 4 weeks, and make a note of the time spent on your computer for work and for personal use. Once documented, you will be able work out what percentage of your computer use is for work.

2. Can I claim a one off tax deduction or do you need to claim it as depreciation?

The answer to question depends on the price of computer.

If your computer cost under $300, you can claim a one-off, immediate tax deduction for the business use percentage of the purchase price.

If your computer cost more than $300, you can claim the depreciation of your computer over the life of the equipment which is 4 years as per ATO guidelines.

3. What if I have hired/leaseda computer?

You can claim a computer as a tax deduction even if you lease or pay a monthly fee for your computer. Claim the business portion of the lease payments on your tax return.

4. How can you prove computer tax deduction?

First you need list of record listed on question 1 plus you need to have a genuine reason to use personal computer for work and it must be a requirement of your job. Note, ATO can request further clarification, in that case you willbe required to prove that personal computer use is a requirement of your job. Also note, most employers provide office facilities and equipment so you are not required to work at home or, if you do, you are provided with work computer/laptop so that don’t need to use your own computer

5. Can I claim a deduction for internet usage?

You can also claim a tax deduction for internet usage. Establish what percentage of your internet use is for work purposes (just as you did for your computer) and claim that percentage of your annual internet bill as a tax deduction.