If you run your small business from home, tax time is a good opportunity to make sure you’re claiming the deductions you’re entitled to.

Depending on your circumstances, you may be able to claim the decline in value of depreciating business assets (such as laptops, desks and office furniture) or running expenses associated with operating your business from home. This includes:

• electricity for heating, cooling and lighting
• phone and internet expenses
• office cleaning costs.

Work out your expenses

Many home-based business owners use the fixed rate method to calculate their work-from-home running expenses. This method allows you to claim a set rate per hour worked from home and can simplify record keeping. Keep in mind that some expenses are already covered by the fixed rate and can’t be claimed separately.

If you have a dedicated area in your home that is used as a genuine place of business, you may also be able to claim occupancy expenses. This may include rent, mortgage interest, council rates, land taxes or home insurance. Eligibility depends on your individual circumstances.

Whatever method you use, remember you can only claim the business portion of your expenses, and you’ll need records to support your claims.

Keep good records

Good record keeping throughout the year can make it easier to prepare and lodge your tax return. You need to keep most records for 5 years, so you should store them in a safe place. They should also be written in English or easily converted to English.

Check if CGT applies

It’s important to remember, when running your business from home, you may be liable for capital gains tax (CGT) when selling your home. If eligible, you may be able to reduce your CGT by applying the small business CGT concessions.

Access free resources

To help you navigate tax time with confidence, explore our Tax Time toolkit for small business. It brings together helpful information, tools, calculators and a range of Small business guides in one convenient place, making it easier to prepare, lodge and stay on track this tax time and throughout the year.

You can also build your knowledge through free, self-paced courses on record keepingExternal Link, claiming deductions for your home-based businessExternal Link and CGTExternal Link using Essentials to strengthen your small businessExternal Link.

Find out more on how to claim deductions with our Home-based business expenses guide.

Keep up to date

ATO has tailored communication channels just for small businesses – so you’ll always be up to date with the latest information and changes relevant to you.

Explore more articles in ATO’s Small business newsroom.

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Source: ATO