Utilising a home office can be great way to keep your overheads low and save money on office space, commuting and food, however a significant proportion of small business owners are unsure about what they can claim in doing so.
Research indicates that 40 per cent of small business owners (Xero Accounting) are uncertain about what expenses qualified for tax exemption, so in an effort to maximise your return and avoid incorrect reporting – consider these tips.
Utilising a home office can be great way to keep your overheads low and save money on office space, commuting and food, however a significant proportion of small business owners are unsure about what they can claim in doing so.
Research indicates that 40 per cent of small business owners (Xero Accounting) are uncertain about what expenses qualified for tax exemption, so in an effort to maximise your return and avoid incorrect reporting – consider these tips.
Utilities
Working from home allows you to claim household running expenses such as gas, electricity and water, however it’s important to remember that these costs must be calculated as a percentage of the space used for business, while common space such as a kitchen or bathroom can not be claimed.
Communication
When it comes to claiming a home phone, mobile and Internet the same principle applies, you’ll need to allocate the amount you spend on personal vs. business. This can be simplified by utilising a specific business line or business mobile for work purposes.
Travel
If you need to travel from your home office for work you can claim a number of things including petrol, tolls and car insurance. Remember it is now important to keep a logbook – documenting your travel time and distance.
Furniture
You can claim the costs or depreciation of any furniture (desks, chairs, computers, lamps, curtains, carpets, light fittings etc.) for the rooms from which you conduct business. If you use that room for any other personal use, then again, you will need to work out percentages.
Utilities
Working from home allows you to claim household running expenses such as gas, electricity and water, however it’s important to remember that these costs must be calculated as a percentage of the space used for business, while common space such as a kitchen or bathroom can not be claimed.
Communication
When it comes to claiming a home phone, mobile and Internet the same principle applies, you’ll need to allocate the amount you spend on personal vs. business. This can be simplified by utilising a specific business line or business mobile for work purposes.
Travel
If you need to travel from your home office for work you can claim a number of things including petrol, tolls and car insurance. Remember it is now important to keep a logbook – documenting your travel time and distance.
Furniture
You can claim the costs or depreciation of any furniture (desks, chairs, computers, lamps, curtains, carpets, light fittings etc.) for the rooms from which you conduct business. If you use that room for any other personal use, then again, you will need to work out percentages.
Occupancy expenses
You can also claim the costs of owning or renting your home (such as rent, mortgage interest, insurance and rates). You can claim the portion of these costs that relates to the room or workshop you use as a place of business.
However, it is important to remember that choosing to claim mortgage payments may mean your are liable to capital gains tax when it comes to selling your home.
In any case where you’re not sure, or where tax policies are still under debate, it’s best to play it safe.
MyTaxDebt has teams of tax specialists all over Australia and if you have tax debt problems, fill out an enquiry form or call 1300 333 433 for a free consultation on your situation.
Occupancy expenses
You can also claim the costs of owning or renting your home (such as rent, mortgage interest, insurance and rates). You can claim the portion of these costs that relates to the room or workshop you use as a place of business.
However, it is important to remember that choosing to claim mortgage payments may mean your are liable to capital gains tax when it comes to selling your home.
In any case where you’re not sure, or where tax policies are still under debate, it’s best to play it safe.
MyTaxDebt has teams of tax specialists all over Australia and if you have tax debt problems, fill out an enquiry form or call 1300 333 433 for a free consultation on your situation.
