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Business Tax Tip – Home Office Expenses allowable by the ATO for you to claim

 images/Business Tax Tips.PNGWanting to know what home office expenses allowable by the ATO are there for you to claim for your small home-based business?

There is great information on the ATO website, and links for more info and a cool expense calculator, and we reproduce some of it here (note also the link to PSI – Professional Services Income – it may affect you!).

If you are a sole trader and your home is also your place of business you can claim tax deductions for a portion of the costs of owning, maintaining and using your home for this purpose. When you sell your home you may be liable for capital gains tax.

If you operate a business at or from your home, you may be able to claim a deduction for some of the expenses relating to the area you use for business purposes.

These expenses can be divided into two broad categories:

  • occupancy expenses (such as mortgage interest or rent, council rates, land taxes, house insurance premiums)
  • running expenses (such as gas and electricity, phone, decline in value of plant and equipment, decline in value and cost of repairs to furniture and furnishings, cleaning)

As for motor vehicles, if you are carrying on a home-based business you can claim the cost of trips between your home and other places if the travel is for business purposes.

Generally, you can ignore a capital gain or loss you make when you sell your home, unless you have used any part of it for business purposes.

Next step:

The Home office expenses calculator helps you work out the amount you can claim as a tax deduction for home office expenses for the current year and the three previous income years.

You will need

    - receipts for

  • home office equipment used for work purposes
  • repairs to the home office or furniture and equipment used for work purposes
  • cleaning expenses of home office
  • any other day-to-day running expenses for the home office

    - records of home expenses.

See also:

Need help? Not sure?

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or click for the list of our articles.

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Accounting Software Australia, MYOB, Quickbooks, accounts software, bookkeeping software
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