Home Based Business
Some business owners, especially those who are just starting out, operates their business from home. There are many benefits to running your business from home such as avoiding the cost of a commercial premises and flexible working hours. However, you need to ensure that all expense claims are genuinely deductible.
Claiming home-based business expenses such as telephone, internet, electricity, interest, insurance etc will need to be apportioned according to the business-related area of the home.
There needs to be a clear distinction between what proportion is private and what is actually related to earning business income.
It is recommended to have a separately identifiable area/areas at your house that clearly define the place where you operate your business.
This allows the correct calculation of the proportion of the home that is related to the business and the proportion that remains private.
The ATO scrutinises claims so it is imperative that the calculations are prepared and accurate.
If you do operate a business out of your home you will also need to consider the Capital Gains Tax consequences.
If you are thinking of starting a home-based business, please give us a call for a free no-obligation discussion to make sure that you start off on the right foot!