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Business Tax Tips – Home Office Expenses the ATO allows you to claim

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Business Tax Tips – Home Office Expenses the ATO allows you to claim

Home Office Expenses the ATO allows you to claim

Wanting to know what home office expenses the ATO allows you to claim for your small business? There is great information on the ATO website, and links for more info and a cool expense calculator, as part-reproduced here –

If you operate your business in full or in part from home, you may be able to claim a deduction for:

  • Occupancy expenses, such as rent, mortgage interest, rates, land taxes and house insurance premiums;
  • Running expenses, such as phone rental and business calls, internet fees, depreciation of office furniture and equipment and any additional heating, cooling, lighting and cleaning expenses.

Before claiming expenses relating to your home work area, we recommend you read Home-based business.

Claiming running expenses and occupancy expenses depends on whether or not your home is your place of business and if you have an area set aside exclusively for business activities.

If your home is your place of business and you have an area set aside exclusively for business activities, you may be able to claim both running and occupancy expenses.

If you carry on your business elsewhere and also do some work at home, you cannot claim occupancy expenses even if you have a home work area set aside.

Our online calculator will help you determine if you’re entitled to occupancy expenses and then calculate your allowable deduction.

Work it out Home office expenses calculator

You can keep a diary to work out how much of your running expenses relate to working at home. All you have to do to support your claims is keep a diary for a representative period of about four weeks each income year.

Alternatively, for home work area expenses, such as heating, cooling, lighting and depreciation of furniture, you can claim a fixed rate, instead of keeping details of actual expenses.

The following table shows the deductions you can claim for the three ways you can work at home.

Business Tax Tips – Home Office Expenses the ATO allows you to claim

There is also a video to explain the deductions.

And the ATO page also alerts you to Personal Services Income that may not allow occupancy expenses, and that Capital Gains Tax may apply – read more HERE.

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Author: Account keeping plus (Business accounting software

Administration, Bookkeeping and Compliance for small business, and Self-Managed Super Funds (SMSF) Training, trouble-shooting, or we can do the books and payroll for you! Self Managed Superannuation Fund Service Provider, Free support 30 min call 0407 361 596 Australia (+61 drop 0 from overseas) MYOB Certified Consultant, Reckon/QuickBooks Professional Partner.

4 thoughts on “Business Tax Tips – Home Office Expenses the ATO allows you to claim

  1. Thank you for sharing this valuable information and tips. Your explanation clearly answers in an understandable way and very helpful! This can give better insights and inspiration for small business owners. We would love to see more updates from you.

    Like

  2. Thanks for sharing this business tax tips. I follow this tips. I think that this definitely help me.

    Like

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