Is home your main place of business?

If you’re a sole trader or operate your business as a partnership, you may be able to claim some running expenses if your home is your main place of business. This can include the cost of electricity, cleaning and depreciation of business assets.

You can use one of the following methods to calculate your expenses:

• actual cost method
• 52 cents per work hour fixed rate, which covers heating, cooling, lighting, cleaning and depreciation of furniture and furnishings
• 80 cents per work hour temporary shortcut method, available from 1 March 2020 to 30 June 2021 and covers all expenses.

The methods cover different expenses so keep good records and check the details to see which works best for you.

You may also be able to claim occupancy expenses if you have a specific area of your house with the character of a ‘place of business’ set aside. This would not include, for example, your dining room table.

If your business is a trust or company, you should have a market-rate rental contract. This will determine what expenses you may be able to claim as a deduction.

You can only claim deductions for the portion of your expenses related to running your business.

Remember, registered tax agents and BAS agents can help you with your tax.

Resource: ATO