Home based businesses deductions

Written on the 20 May 2014 by Macmillans Waller Fry - Accountants Maitland

Businesses that are run from home can claim deductions on their tax return. These include:

1. Cost of room’s utilities

These claims must be apportioned and if the portion is based on anything other than the floor area the claim must be clearly documented.

2. Phone costs

If a telephone is used exclusively for business, owners can claim for the rental and calls but not the installation costs.

3. Decline in value

This can apply to items such as desks and computers. If the equipment is also used for personal use then the claim must be apportioned.

4. Costs of owning the house

The most common method for claiming costs for the room that is used as a business is using the floor area as a proportion of the whole home. Owners should be aware of potential CGT implications when selling the home.