If your home doubles as your workplace make sure you’re squeezing every last deductable dollar from this year’s tax return.
“There are a lot of misconceptions about what you can and can’t claim for your home office,” says John Knight of Brisbane-based advisory firm businessDEPOT. “It’s important that you get the right advice to make sure you are claiming everything you are entitled to.”
Here’s a few tips to make sure your home earns its keep this tax season:
- If you do a few hours of work at home each week, your deductions will be limited to running costs. These include a portion of electricity, work related phone calls, stationery and depreciation of equipment. Where you purchase equipment that costs less than $300 you can claim a deduction for the full amount where it is used for work related purposes.
- If you run your own business from home you may also be able to claim additional deductions for occupancy costs where you set aside part of the house exclusively for the business. These costs include a percentage of rates, mortgage interest or rent, insurance and depreciation of carpets or fixtures. Typically, this percentage will be the proportion of the floor space that is used exclusively for the business.
- If you are required to work from home on a permanent basis there may be scope to claim deductions for occupancy costs. This is a grey area and you should speak to your accountant before claiming these costs.
But – be warned – where you run a business from your home this will affect your eligibility to claim an exemption from capital gains tax when you sell your house.