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.
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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