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Can I claim a desk on tax deductions? This is a question we see asked all the time. The fact of the matter is that claiming desk on tax can be complicated in Australia.
Whether you work from home permanently or temporarily, you most probably have a lot of office equipment at your home. You might even be thinking of purchasing a motorized standing desk for your home office setup. And if you're looking for the best standing up desk in Australia, look no further than UpDown Desk. Across our entire catalog, you'll find the premier selection of height adjustable desks online - sit to stand corner desks, traditional ergonomic standing desks, and even manual height adjustable desks - we've got it all.
There are so many reasons standing desks are worth it - better productivity, enhanced health and comfort, and the aesthetic they provide. But, they're pretty expensive - which leads many Australians to wonder if you can claim a desk on taxes at the end of the year.
You might want to ensure that your valuables, such as your standing desk are covered when tax time approaches. Read below to find out whether your standing desk is tax deductible.
Is it possible to claim a desk on tax returns? The answer is yes.
Business owners & individuals who are working from home can claim a tax deduction on a majority of expenses that are required when carrying out their business. These expenses need to be directly related to gaining assessable earnings.
It’s difficult to carry out the necessary work without relying on a functional workplace setup. For this reason, you can claim a tax deduction for office furniture, such as standing desks, chairs, shelves, and storage.
Office equipment qualifies as a capital expense. Capital expenses refer to the costs that you incur when purchasing assets that have a serviceable life over 1 year.
The criteria for what office furniture can be claimed for tax deduction are as follow:
As an employee, you are also allowed to claim a tax deduction on office furniture. Make sure that you have not already claimed these amounts with your employer.
For these reasons, it doesn’t matter whether you’re running a small business, working from home, or you are an employee of a large corporation. If you are an Australian tax resident you are eligible to claim deductions when submitting your yearly tax return.
So, you know you can take advantage of a home office deduction on your taxes when you invest in certain home office equipment. But how do you write off standing desks on taxes? How do home office expenses work come tax season?
Let’s say you’ve already set up your home office with furniture, such as a new standing desk. If that’s the case, you can claim a deduction for the decline in value of that standing desk to the degree that it relates to your work operations.
The standing desk’s “effective life” will permit you to claim a deduction.
A standing desk that costs less than $300 can be written off and does not need to be depreciated.
If, for example, you have a tax rate of 30%, you can claim back 30% of your spending on office equipment. If you spend $2,000 on a new standing desk, your income tax deduction would amount to $600. Unless you are carrying on a business and use the Temporary Full Expensing measures (see below) you will deduct this amount over time as the value of the asset declines. This will be over multiple tax years.
In essence, submitting tax deduction office furniture claims will ensure a deduction for:
To figure out the exact drop in the value of your furniture year after year, you need to know how long standing desks last.
You can also check out what the ATO says about claiming expenses for working from home here.
Temporary full expensing is a scheme that applies to people carrying on a business. This scheme lets you write off the entire cost of an asset that was bought during the financial year. It applies to the 2020-21, 2021-22, and 2022-23 income years. If you want to check if you are "carrying on a business" for tax purposes refer to the ATO website.
The deduction is available from when the desk is first held, first used, or installed ready for use for a taxable purpose. A taxable purpose means carrying on work in the business.
By subtracting the full expense, you can decrease your total taxable income.
With the temporary full expensing measure, you can claim a deduction on your tax return for the full price of office furniture, including your new standing desk.
It’s recommended to take advantage of the temporary full expensing measure, so you don't have to wait and claim the costs back in the future.
This initiative has been extended until 30 June 2023. Note that businesses with an aggregate annual turnover of more than $5 billion are not eligible for the temporary full expensing measure (unless they are a corporate tax entity that meets an alternative income test).
This makes buying any desks and accessories surprisingly cost-effective. You and your staff will all enjoy what a sit-stand electric desk has to offer for both increased productivity and reduced pain from bad posture.
You can read more about the Temporary Full Expensing measures on the ATO website.
In the federal budget handed down on 9 May 2023 the government proposed to introduce a Small Business Support measure for the 2023/2024 tax year increasing the instant asset write-off threshold to $20,000. This will apply on a per asset basis. This is proposed to apply to businesses with aggregate turnover less than $10 million.
This will allow eligible small businesses to claim an upfront deduction for their standing desk purchases.
This measure is not yet law.
Ready to learn how to cover your standing desk for tax deductions? We described how home office expenses work above. But now, we want to take you on a step-by-step journey to claiming a desk on tax deductions. It's as simple as assembling an inventory list, keeping track of your receipts, archiving your records, and deducting the right expense from your taxes. Keep reading to learn more...
If you want to make a claim for a home office deduction, then it’s important to keep track of all of your office equipment. The first important step is to make an inventory list.
It’s common for employees and employers to have inadequate documents to support tax deduction claims.
If you bought a new standing desk or any new office furniture, make sure to hang onto those receipts so you can claim them later.
Make a note of the standing desk model. This will help you track the item over time, as well as provide useful information.
Keeping accurate records of your office expenses allows you to submit a concise and clear claim on your office tax deduction.
If you don’t want to invest in a fully built standing desk, you can look into investing in a standing desk riser for your office. These are significantly cheaper than standing desks, but you can still claim for them provided you follow the same steps.
Store your digital records. You can do this by taking photos of the standing desk and storing them on an off-site external hard drive or cloud-based storage.
The COVID-19 pandemic changed the way many organisations do business. Companies need to prioritise the safety of their employees and as such, many employees have been given the option to work from home.
However, there are still costs involved in work operations, such as furnishings and equipment. Thankfully, you are permitted to claim a tax deduction on home office furniture, and this includes standing desks for your own business. You'll be glad you did - and if you're not convinced, read our blog post on standing desks and productivity! This investment pays for itself fast - so upgrade your workspace today.