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Maximising your tax return as a home-based business

Small business owners may be able to claim deductions for the costs of using your home as a principal place of business when filing your 2019 income tax return.

Tax deductions may be claimed for the business portion of expenses that include electricity, cleaning, rent payments or mortgage repayments. However, it can be difficult to ensure you are claiming expenses you are entitled to. How you operate the business out of your home will determine the types of expenses that may be claimed. Your business structure will also affect your entitlements and obligations when claiming deductions on home-based business expenses.

Individuals that operate a business as a sole trader or partnership are entitled to claim a deduction for the costs of running their business from home. There are two types of expenses that can be claimed, running expenses or occupancy expenses. Running expenses refer to the increased costs of using your home’s facilities for the running of your business. Occupancy expenses are those that you pay to own or rent your home.

Typically, those that are eligible to claim occupancy expenses can also claim running expenses. Records that need to be kept include written evidence, tax invoices and receipts, which should substantiate your claims for all home-based business expenses. You may consider consulting a trusted advisor or registered tax agent to ensure that you meet all obligations when claiming deductions in your tax return.

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News

Amnesty means that 24,000 businesses own up to underpaying Aussies superannuation

September 24, 2020

An amnesty scheme which ended earlier this month has caused around 24,000 businesses to admit to underpayment of their worker’s super. A total of 588 million dollars will be distributed to almost 400,00 individuals.

The scheme, which covered payments from the introduction of super in 1992, gave employers the opportunity to come clean without any consequences as long as they paid the unpaid super as well as 10% interest for every year the money was overdue.

The ATO will be directing its attention at any businesses that did not admit fault and these businesses will face severe penalties.

Many individuals are looking to access their superannuation early in order to have support during these times. Although there is criticism of early access to super, this facility has been helpful to many families to keep afloat.