The home is also the principle place of business for many taxpayers these days. Yet it can be confusing to work out what deductions you can claim if you are working from home. Here is a general summary of the typical deductions you can claim:
- Expenses relating to the area of the home you use for business. By determining the area of business space used and dividing this by the total area of your home, you can calculate the percentage for business use. You can then apply this percentage to claim the following deductions:
- Occupancy expenses including mortgage interest or rent, council rates, land taxes and house insurance premiums.
- Running costs including electricity, gas, business phone and internet costs, cleaning, repairs to plant/equipment, and furniture.
- Work-related car and travel expenses incurred when travelling between your home and other places of business. Generally, you cannot claim the cost of any travel between your home and your workplace. However, where your home is your workplace, this rule does not apply. You can potentially claim the following expenses:
- The cost of travel from your home-based business to a client’s location
- Picking up materials and supplies
- Doing the banking
- Going to the post office
- Seeing your tax agent
It is also recommended that you keep a logbook to record the percentage of business conducted while using your vehicle.
We can assist you with determining what expenses you can deduct in running your home based business right here at Source Accounting.