If your home is your primary place of business, you may be able to claim the business portion of some expenses. You can't claim deductions for private costs.
Examples where your home is considered a place of business include:
- a small business operator whose main office is in their home
- a tradesperson or craftsperson who has their workshop at home
- a doctor or dentist who has their surgery or consulting room at home.
You may be able to calculate your home-based business running expenses using:
- a fixed rate of 52 cents an hour for each hour you operate your business from home
- This covers heating, cooling, lighting, cleaning and the depreciation of furniture and furnishings.
- You will need to separately calculate phone and internet expenses, consumables and certain depreciation expenses.
- the temporary working from home shortcut method of 80 cents an hours
- This can be used by individuals running home-based businesses from 1 March 2020 until 30 September 2020.
- This covers all the expenses normally included under the 52 cents rate and all additional deductible running expenses.
- any other reasonable method.
You may also be able to claim occupancy expenses, like rent, mortgage interest, water rates, land taxes and house insurance premiums, in certain circumstances. However, if you earn personal services income (PSI), you may not be able to claim a deduction for occupancy expenses.
Exclude your private living costs and keep records to show how you calculated your expenses.
You can't claim the same expenses two different ways. The temporary working from home shortcut method is all-inclusive.
For example, you can't claim the full cost of purchasing a photocopier using instant asset write-off and also claim with the home shortcut method.
If you would like any further information or assistance in regards to Home Business Expenses, please feel free to contact us on 1300 885 761.