Your home office is likely to be one of your biggest business deductions.
Ask any proactive tax accountant or business person and they’ll likely agree with me. Recorded properly, this is one of the all around best deductions dollar for dollar.
Since you probably work at home, quite a bit, you’ll be saving big money just by creating a work space in your home. To deduct part of your home as a business expense, the home office must be used regularly and exlusively in one of two ways:
Many people who run a small business use an area set aside in the family home for work purposes. If you are doing this, you can make a claim for the area set aside so long as:
* It is used principally for business use (such as an office or storage area), and
* You keep a full record of all expenses you wish to claim.
The responsibility for keeping invoices and records for a home office is the same as for any other business expenses you are claiming. You can claim a portion of the household expenses, such as the rates, insurance, power, mortgage interest and depreciation (if you own the house). You must keep invoices for these expenses.
You can only claim the expenses that relate to the area set aside for business. Work out the percentage of the work area, compared to the total floor area of the house. Then apply this percentage to the total house expenses.
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