Home Office expenses

Where home is your place of work & you have a room dedicated for your home office, how does the 45 cent per hour claim work? I believe the 45 cents per hour i to cover electricity and gas and the depreciation of office furniture.

Can you still claim a percentage of the rent you pay (if renting) based on the room used for home office plus a percentage of internet costs plus also the 45 cents per hour?

 

Taxation Ruling TR 93/30 discusses home office expenses and divides home office expenses into two broad categories

• Occupancy expenses - expenses relating to ownership of use of a home which are not affected by the taxpayer's income earning activities. These include rent, mortgage interest, municipal and water rates, land taxes and house insurance premiums.
  
  • Running expenses - expenses relating to the use of facilities within the home. These include electricity charges for heating, cooling and lighting; cleaning costs; depreciation; leasing charges and the cost of repairs on items of furniture and furnishings in the office.

The deductibility of these categories of home office expenses depends on whether the home office has the character of a place of business or a private study. Paragraph 7 of TR 93/30 provides that where the home office has the character of:

• a place of business - some part of the expenses from both categories, occupancy expenses and running expenses, may be deductible.
  
  • a private study - only some part of the running expenses may be deductible

Some factors which may indicate whether or not an area set aside has the character of a 'place of business' include:

• the area is clearly identifiable as a place of business
  
  • the area is not readily suitable or adaptable for use for private or domestic purposes in association with the home generally
  
  • the area is used exclusively or almost exclusively for carrying on a business
  
  • the area is used regularly for visits of clients or customers
  
  • the taxpayer's circumstances are such that there is no alternative place for conducting work-related activities, making it necessary to work from home

 

Ok thanks for the info Mike