Tax Deductions You Can Claim for Home Office Expenses

When you work from home you may be able to claim any work related portion of your home expenses as a Tax deduction.

Home office expenses may include running costs such as: heating, electricity and decline in value of office furniture; occupancy expenses such as rent, mortgage interest, council rate, house insurance premium etc. There are strict rules about Home Office Tax deductions and generally you are not entitled to claim occupancy expenses if your source of income is from employment, unless you are running a home based business and your home is considered to be a place of business. Also, if your employer has an office in the city or town where you live, your Home Office will not be qualified as a place of business, even if your work requires you to work outside normal business hours. Taxation Ruling TR 93/30 – Income tax: deductions for home office expenses explains in details income tax deductions for home office expenses.

Work Related Home Office Claiming Methods

There are two methods available to work out your Tax deductions for the electricity and gas you use and the decline in value of your office furniture.  You can use whichever one you wish:

• Deduction for your actual expenses (apportioned between private and work related usage).
• Cents per hour method (currently 45 cent/hour). If you choose this method you need to keep a diary to record the amount of time used for home office.

Other Claims For Work Related Home Office 

Beside the above expenses you may also claim work related:

• Decline in value of Home Office equipment such as computer, printer, telephone
• Printing consumables, stationery, phone-calls and internet costs claimed on an actual expense basis

We always advise our clients to keep the receipts and relevant records even if they are not sure if they can claim an expense. This enable us to assess all their eligible claims when we are preparing their Tax Return.

The rules and regulations regarding Home Office expenses are very complex and sometimes it might be difficult for you to understand where are your specific situation sits. If you are working from home or running a home business and you are not sure about what you are allowed to claim, we strongly recommend you to seek professional advice from a registered Tax Agent or get in touch with our qualified team by phoning 02 94167600!

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