Tax Question re rent expense

Hey Guys,

Looking for some advice on my current scenario:

Renting 1 bed + Study apartment. Study is used as home-office (therefore, 25% of floor space is used for work purposes).
I work 4 days from home & 3 days in my office.
How much of my rent expenditure, running expenses (e.g. electricity, gas) is tax deductible?
My current structure at work is PAYG base salary + commissions.
If needed I can establish Sole Trader ABN & contract to my employer? This is the plan long term for me anyways, however will probably establish Pty Ltd company.
Any help appreciated.

 

Are you self employed?

How often do clients come to your office?

 

I am not self employed...yet. I am payed a wage by my employer plus commisions. I have the option to go self employed & basicaly contract to my employer at any stage if i want to. Hope this makes sense?

Clients never come to my home-office.

 

In that case I think you could only claim part of the heating, electricity etc related to the room

 

And a employer cant lead you to have a ABN and be considered in business. You would not be entitled to a ABN. The contracting entity would still be liable for your super, payroll tax, workers comp etc...A sole trader cant "contract" to their employer as such. A employee is a employee. Sham contracting ? Read what Fair Work Australia have to say.

A company may have the exact outcomes. Personal Services Income rules don't allow the company any extra deductions than you have now.

 

My account recently told me that if rienting a studio room & using it part of it as a home office then you can claim 40% of expenses, eg. 40% of rent, electricity, internet, etc.

 

This is just plain wrong. Unless you are running a home based business - massage services?

can't be an office if you are sleeping in it.

 

Share trading in a studio room.

 

Don't think you could justify claiming much in this case.

 

Ok I'll relook at what might be more reasonable. I'm thinking around 20-25%? Don't want to get too high if it will bring problems later on.

 

I would think more like 0%. But Sim is right.

 

Wow really 0% claimable? You're working from home as a full time share trader & can't claim any rent, electricity or internet? Would a share trader need to rent a commercial office & operate from there to claim anything?

 

You could claim a percentage of running expenses, but I don't see how you could justify any part of the rent as this is a private expense.

 

Ok thanks for both of your contributions, I'll look into that link further

 

Actually, it says "you can claim a deduction of 34 cents per hour based on actual use or an established pattern of use. This rate is based on average energy costs and the value of common furniture items used in home work areas"

So if you live overseas in a cheap country where electricity is cheap then you can still claim 34 cents an hour & it will end up a lot higher than your actual electricity bill? If so, that's cool

34 cents x 10 hours in front of a computer x 5 days x 4 weeks = $68

But your monthly electricity bill is about $50/month

 

From memory Terry isn't there a CGT issue on a PPOR if you have used it as a home office and claimed a deduction for the space you use, not the services which are a running expense but when people claim a floor space percentage against the PPOR?