Claim tax from work at home

AUSSIES who work from home are missing out on valuable tax deductions because they are confused about what they can claim.

NATIONAL FEATURES - Your money - generic images of calendar with the words 'tax time' written in red texta on the 30 June diary entry.

HOME-based business owners risk missing out on valuable tax deductions because they are confused about what they can claim.

Of Australia’s 1.8 million small businesses, about 1.2 million are sole traders, and experts say getting good advice can be vital to save on tax.

Xero managing director Chris Ridd says home-based business owners can generally claim all the deductions any other small business can, plus some specific deductions.

“You can claim a deduction for any expenses running your home that are above the costs you would have incurred by living in the home,” he says.

Energy, phone, internet costs and wear and tear of equipment are examples, and people can also claim occupancy expenses such as council rates and insurance, but be careful about claiming a portion of mortgage interest, which can cause capital gains tax issues.

“There could be more awareness about what opportunities there are to claim home-based business expenses,” Ridd says.

“I think generally people going into small business are doing so because they are passionate about something, and tend not to focus on some of the accounting-based issues that they need to be aware about.

“Accounting tends to be a bit of an afterthought.”

TITLE: NN-WEB-PROMO-MSHQ-BETTER-HEALTH