Home Office Tax Deductions

Have you been running a home office and are not sure what deductions can you claim?

Read further, this article will help shed some light on home office expenses that are deductible on your tax return. In this post I’m going to be focusing on tax deductions that can be claimed in your tax return for the home office expenses.

Home office deductions, or working from home deductions, can be claimed if you produce your income at home, and incur expenses from using your home as your ‘office’. If you are an employee and are required to use your computer, phone or other electronic devices for work purposes, you are also eligible to claim a deduction for your costs.

You can claim a proportion of tax deduction as per the work usage for the expenses that fall into the following categories:

• Telephone and Internet,
• Occupancy expenses,
• Running expenses and
• Depreciation on equipment.

Running expenses include internet, electricity, water and gas. In order to claim for these though, you need to keep a record of the number of hours you use the home office. It is important to note that if you do claim a deduction on your utilities, you need to be able to demonstrate how you arrived at the amount you’re wanting to claim as deduction. Tax office has a set rate of $0.34 cents per hour of work usage for the home office to cover the running expenses.

For occupancy expenses such as mortgage, rates and home insurance, these are only deductible where the home is the place of business.

Depreciation on home office equipment includes, but is not limited to, furniture, carpet, computer and printer. The use of these must be recorded covering income-related and non-income related use, showing nature of the use of equipment and the period of time it was used for.

Deductions are generally only available for the decline in value of office furniture. You cannot claim a deduction in value on your curtains or lights or claims for the cost of owing or renting the house unless a specific area – usually a room – is set aside solely for business use.
Please note these are generic home office deductions, you might be eligible for more industry specific deductions.

If you have been working from home or running a home business and not sure what deductions are you entitled to claim on your tax return.

Call Tax Accountants Cranbourne at 1300 300 106 for further information.