Private ruling: Home office internet expenses
Published: April 2013
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for the income producing portion of your internet and internet security expenses incurred? | A1: Yes.

Relevant facts and circumstances: You are employed by a business. You do not work from home. However the nature of your work requires you to undertake work related administration activities from your home outside of work hours, which requires the use of a computer and internet. You do not currently use the internet for private purposes, as all internet browsing and private emails are attended to on your iPhone, which does not use the home internet. You are the only personal living at your home; therefore no other individual uses the internet. The internet may be used it for private purposes in the future. You incur a monthly charge for the home internet. You also incur an annual charge for internet security on your computer.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Division 900

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. You are required to perform some work related administration activities from your home outside of work hours, which requires the use of your home computer and internet. Further you require internet protection software for your computer while performing these tasks. As the expenses directly relates to your employment, you are entitled to a deduction for work related portion of the internet fees and internet protection software costs incurred under section 8-1 of the ITAA 1997. Please note that any establishment costs and/or application fee you may have incurred for the internet connection is considered capital in nature, and is not an allowable deduction. Substantiation Division 900 of the ITAA 1997 states the substantiation requirements in relation to internet use. A diary record covering a representative four week period must be kept to show the nature of each use (income producing purpose or private use) and the period of time used. From this a reasonable estimate of work related internet use can be established for apportioning the deduction.