Tax Deductible Claims That a Home-Based Business Can File

Today, businesses are no longer being run exclusively from city buildings and stores. It is evident from the growing number of home-based enterprises, which stems from their flexibility. The best part is that there are many ways that home-based businesses can deduct costs from their tax returns. Unfortunately, most people do not have the business accounting information, missing valid deductions. That said, it is crucial to stay within the rules and regulations regarding tax deductions to avoid hefty penalties. This article highlights office expenses that a home-based business accountant can claim as a tax deduction.

Home Office Equipment

It is impossible to run a home-based business without furniture and other equipment such as computers, printers, fax machines, and telephones. If you have any of these pieces of equipment, you can claim the full cost of purchase. Moreover, since home-office equipment decline in value over time, you can depreciate them and claim a deduction each year. Furniture such as desks, shelving, seats, and cupboards relating to home-based business activities should be treated the same.

Heating, Cooling, and Lighting

Air conditioning and lighting are critical resources necessary for running a business, whether home-based or not. Without them, it would be nearly impossible to generate returns to fulfil tax obligations. Therefore, home-based business accountants can claim part of the household utility bills relating to business activities. However, you must be careful not to claim utilities not directly associated with running a home-based business entity. For instance, if you are a part-time student and you use your business's home-office for your studies in the evenings, you cannot claim tax deductions for this period. Additionally, you cannot claim bills explicitly related to house chores. For example, if you make a mid-morning snack in the kitchen while running your business in the home office, the electricity bill is not a tax-deductible claim.

Work-Related Phone Expenses

Communication is a critical element of running a successful home-based business. In fact, phone and conference calls, text messages, emails, online research, and tracking can run into hundreds of dollars annually or even more for a busy business. Therefore, the Australian Tax Office allows you to deduct and claim parts of the phone expenses directly related to your business activities. It does not matter whether the overheads were incurred away from the home-based office as long as you can prove that they are directly related to your operations.

Reach out to a professional who provides business accounting services to learn more.