Working from home? Your home office might be tax deductible. With the end of yet another financial year, many of us are starting to pull together the important documents and files you need to complete your tax return. When it comes to what you can claim, the Australian Taxation Office (ATO) outlines strict regulations.

Claiming on expenses

If you are a sole trader who runs a home-based business, you may be able to claim on the costs of owning, maintaining and using your home for this purpose. The ATO divides expenses into two broad categories:

  • Occupancy expenses
    This includes things like your mortgage interest or rent, council rates, land taxes and house insurance premiums. For more information on what is considered and occupancy expense and how to claim on these expenses, click here.
  • Running expenses
    This includes gas and electricity, phone, decline in value of plant and equipment and the decline in value and cost of repairs for furniture. For more information on what is classified as a running expense and how you can claim on these expenses, click here.

If your business requires you to travel with a vehicle, you may be able to claim on the trips you take for business. So, you could claim on the cost of driving from home to a client’s premises if you are working there or delivering some documents, purchasing equipment or supplies, driving to the bank or post office or seeing your tax adviser. For more information on claiming motor vehicle expenses, visit the ATO’s website.

How to claim

To help those completing their own tax return, the ATO provide a home office expense calculator to help work out the amount you can claim this financial year. To work this out, you’ll need the receipts for any of the home office equipment you use for work purposes, repairs completed, cleaning expenses and other day-to-day running expenses. You should also keep the records for your other home expenses nearby.

To complete the home office expenses calculator and estimate how much you can claim, click here. If you’re unsure of something, speak to an accountant who can help you work through your tax return.