In a Covid-ravaged financial year, small business owners need consider what actions now can benefit in saving income tax. Taxpayers with the best records often have the best deductions.
With just a few weeks to go until 30 June, it is time to check the log books for telephone use, diary of home-office hours use, or vehicle logbook if using those methods.
If your room has a designated workspace or room, calculate the work-related portion of most or all home office expenses. The new covid work at home deduction is usually the lowest calculation but it is easy.
If you are running your own business from home, you may also be able to claim work-related share of occupancy expenses.
Start with all the costs for the premises – but not rates or interest on the home loan. Working with your tax agent can clarify what portion can be claimed.
The Australian Taxation Office recently warned people to be careful with work-related expenses such as car and travel claims, which are expected to fall in this years income tax returns, with so many people working from home.
Examples of home office equipment which can be claimed in full –
- Home printers
- Sit-stand desks and ergonomic seats
- Health and safety products, including social distancing floor decals and so-called sneeze screens
There is in effect no limit on how much you can spend on home office equipment – consider your budget though before deciding a tax purpose is the dominant reason to buy.
Don’t forget internet services, phone plans, backup & anti-virus software in the list to claim.