Where the home office is the sole location for conducting a business, taxpayers can claim occupancy costs, such as rates, mortgage interest, rent and insurance together with running costs, apportioned depending on business use.
Where a home office is used for work-related purposes and the taxpayer has a main office elsewhere but chooses to work from home, taxpayers can only claim running costs.
When claiming running costs, taxpayers can choose to claim on the basis of apportioning actual expenditure or use the Tax Office fixed rate of 45 cents per hour.
The Tax Office rate covers costs including decline in value of computers and other assets, electricity, internet and phone rental costs.
Taxpayers need to keep a diary over a 4 week period demonstrating the average time spent using the home office for business purposes.
The 45 cents rate for home office expenses applies from July 1, 2014, which is up from 34 cents.
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