Home based business deductions


Businesses that operate from home can claim deductions for  expenses incurred if it can be shown that part of the home is  used for income earning purposes.

There are number of expenses that you can claim as a  deduction:

 – Telephone and internet expenses: If you have used your  telephone for both private and business a percentage will be  calculated. However if your phone is exclusively for your  business this can be claimed, however not installation costs.

– Heating and lighting expenses: These can be claimed but must be apportioned between business and private usage.

– Occupancy expenses (whereby the home is a place of business): This can include rent, mortgage interest, council rates, house insurance premiums etc. You are able to claim the portion of these costs that relate to the room which is used for business.

Note: If you elect to claim occupancy expenses there are CGT (Capital Gains Implications) implications.

-Motor vehicle expenses: Travelling between your workplace to your home are not deductible as this is private. However home based businesses can claim travel expenses if it is between your home and other locations (if business related). Example: Visiting a client for a meeting or even better driving to your accountant!

-Decline in value (Depreciation): This is applied to office equipment such as desks, chairs and computers.

Thank you for reading!

If you have any queries please do not hesitate to contact our office on (03) 9728 1448 or email [email protected]