Working from home has become a commonplace trend and if you too work part-time or full-time then you can claim tax deductions. Understanding the specific claims on the tax returns can save you a lot of money.
Top Accountants in Melbourne help to specify the expenses into two categories -
- Home office occupancy expenses
- Home office running expenses
- Home office occupancy expenses
Occupancy expenses refer to the costs that are associated with using your home as your workplace. In general, the home occupancy expenses are based on the percentage of your home as a workplace. This includes -
- Mortgage interest
- Rent
- Land rates
- Computer
- Internet and phone
- Office equipment
Before making claims on the home office you must pass the interest deductibility test provided by ATO. This means that the area must display specific traits to qualify for the purpose. These include -
- The area should be used for business and visited by the clients
- It must have a clear sign to identify as a place of business
- The area should not be adaptable for domestic purpose
- Home office running expenses
If you choose to work from home on a part-time basis then you can claim a Tax Return in Melbourne. However, you cannot claim home office occupancy expenses. Some of these include -
- Phone costs related to the business
- Cleaning expenses
- Depreciation value for office equipment
- Depreciation value of furniture and accessories
- Power costs for the room
- Cost of repairs for furniture and equipment
However, you cannot claim the following -
- Home internet
- Mobile phones
- Personal computer depreciation value
- Office equipment
- Stationery
These expenses can be claimed on your tax return in two ways
- Actual amount spent
- 80 cents per hour
It is important to note that the occupancy expenses claim affects the main residence exemption. These can be applied to capital gains tax. As a result, you may end up paying part of the amount for your house before it sells. Since some numerous considerations and factors influence home and office expenses. It can be extremely confusing and as a result, you need to seek the aid of the best Accountants in Melbourne to get maximum deductions especially on your tax returns.
