Home office expenses
Do you have an office at home? Do you use it for income producing purposes and incur additional running costs? If you answered ‘yes’ to these questions then you may be entitled to claim a deduction for ‘running expenses’.
What you can claim:
- Expenses such as heating and electricity costs
- Telephone expenses
- Depreciation of office equipment. This may include computers, printers, desks, etc.
There are two ways to calculate the deduction:
- Using actual expenses
- Making calculations based on 26 cents per hour.
To claim the hourly rate you need to keep a diary for a four week period that establishes a pattern of use. A new diary must be kept for each financial year and be kept for five years.
Where there is no pattern, records must be kept throughout the year noting the duration and purpose of each home office use.
For telephone expenses there are two options:
- Business related calls can be identified from an itemised telephone account, or
- A four week diary can be used to make a reasonable estimate of the number of business calls.
Claiming ‘running expenses’ does not usually affect the main residence exemption however if you claim occupancy expenses such as interest, repairs, a proportion of rates and house insurance, it may affect your main residence exemption. If so it would result in the payment of capital gains tax on a portion of the sale of your property should you decide to sell.