Working out your home office tax deductions can be quite difficult if you are unfamiliar with the process.
Many Australians are now taking their work home rather than leaving it in the office. Modern office culture has evolved and traditional office-orientated jobs are now regularly being performed from the comfort of Australian homes. With the rise of bloggers and influencers who primarily work from home, the tax man has become a lot busier with home office expenses over the past couple of years.
Things to consider – Full time, part time, casual
The first thing you will need to consider is what type of home office you run and how often you work from home. We have split this into 3 categories, full-time home office, part-time home office and casual home office.
Your home would be your main place of work with a designated work area. Someone who runs a small business from their home would be an example of someone who uses their home office full -time.
Your home would not be your main place of work, although you do have a designated area for work purposes. A musician would be an example of someone who has a part-time office. Their main place of work would be a venue playing a gig, although they would use their home office to do their paperwork, invoicing or book gigs.
Your home is not your main place of work, however you can work from home with or without a designated work space to complete work tasks. An office worker who can work from home if needed, is an example of a casual home office.
What Can I Claim?
Dependent on how you use and how often you are physically occupying the space for work purposes will determine what you can and cannot claim. The most popular deductions for a home office include Occupancy expenses (rent, council rates, mortgage interest), Running expenses (heating, cooling, gas and electricity), Communication and Internet expenses (home phone, mobile and internet) and Office equipment and furniture expenses (computer, desk, chair and stationary).
Claiming home office expenses legitimately and accurately can greatly increase your annual tax return. The benefit of working from home is not limited to working in your pyjamas! It can be quite tricky to work out whether you are full-time, part-time or casual in terms of a home office user. For this reason, we suggest you engage a trusted tax agent to help you with all the fiddly numbers and percentages.
The team at Tax Return are leaders in the market, Contact us today to get your Home Office Tax Deductions in order!