Claiming Home Office Expenses If you carry on all or part of your employment activities from home, then some portion of the home running expenses can be a tax deduction. Ideally, you should have a room set aside as a home office. Whilst you do not need to have a room set aside for your home office claim, if you are using a room with a dual purpose (e.g. dining room), or a room shared with others (e.g. lounge room) you can only claim the expenses for the hours you had exclusive use of the area. The expenses you can claim are: Heating, cooling and lighting Decline in value (depreciation) of home office furniture and fittings Decline in value of office equipment and computer Computer consumables, stationery, telephone and internet costs claimed on an actual expense basis Methods of claiming: Diary method/actual running expenses You will need to keep a diary to calculate how much of your running expenses relate to doing work in your home office. The diary needs to detail the time you spend in the home office compared with other users of the home office. Keep diary records for a representative four-week period. Tax Office rate per hour method You can use a fixed rate of 34 cents per hour (updated for 2011 tax year) for home office expenses for heating, cooling, lighting and the decline in value of furniture instead of keeping details of actual costs. You just need to keep a record of the number of hours you use the home office and multiply that by 34 cents per hour. Under this method you can also include the decline in value of office equipment (i.e. computers, faxes, etc.) but not furniture. The following costs are not deductible as part of home office expenses: Mortgage or interest costs Rates and taxes Depreciation on the home Should you wish to discuss further clarification do not hesitate in contacting our office.

Car travel as a tax deduction If you use your car for work you are entitled to claim the expenses that relate to the business costs of using your car to do your job as a tax deduction. There are a number of methods you can use to claim the car expenses. You must own the car to claim under any of these methods and the record keeping requirement is detailed for each method. Method 1 â€" Cents per kilometre Your claim is based on a set rate for each business kilometre you travel and you can claim a maximum of 5,000 kilometres under this method. If you travel more than 5,000 kilometres the claim must be limited to 5,000 or you need to use an alternative method of claim. You do not need written evidence but you need to be able to demonstrate that you have incurred the expense. Diary records will suffice. Method 2 â€" 12% of original value Your claim is based on 12% of the original value of your car. Luxury car limits apply. Your car must have (or would have) travelled more than 5,000 business kilometres in the income year. Method 3 â€" One-third of actual expenses You claim one-third of your car's expenses. Your car must have (or would have) travelled more than 5,000 business kilometres in the income year. You need written evidence of fuel and oil costs and for all other expenses for the car. Method 4 â€" Logbook Your claim is based on the business use percentage of each car expense which is determined by a log book that must have been kept for a minimum 12 week period. This log book must be updated every 5 years. You need odometer readings for the start and end of the period that you owned or leased the car. You need to detail all the kilometres you have travelled for the log book period. You can claim all expenses that relate to the operation of the car and you will need to keep receipts to justify your claim. Important Note: If your car is provided by your employer, or as part of your salary package you cannot claim any of the car costs, whatsoever. What you cannot claim You cannot claim the cost of normal trips between home and work because that travel is private even if: You do minor tasks on the way to work, such as picking up the mail You travel back to work for a security call out or parent teacher interviews You work overtime and no public transport is available to use to get you home Should you like further clarification do not hesitate in contacting our office.

What you should be aware of 1. Rent The income received is taxable to the owners of the property in the same proportion as the ownership interest as shown on the title. The rent received must be at normal market rates to be able to claim all the expense in full. The rent must be declared in the year it is received. 2. Interest Claims Interest paid on the loan used to purchase the property is deductible, provided that all the money borrowed was used to purchase the property. For accounts that are a line of credit and used privately as well, the interest claim needs to be apportioned for the private expenses 3. Deductions Repairs - made to the property during the period it is leased are deductible but generally not repairs carried out within the initial 12 months of owning the property (these can be used to reduce a capital gain on disposal). Improvements - you make to the property are not deductible in full. They need to be depreciated and claimed over their effective life Other expense can include Advertising for tenants; Cleaning; Gardening; Insurance; Lease costs; Property agent's fees; Security; Telephone; Bank charges; Council rates; Lawn mowing; Land tax; Pest control; Travel expenses; Stationery; Travel; Body corporate fees; Electricity and gas; In-house audio/video service charges; Legal expenses re leases etc; Mortgage discharge expenses; Quantity surveyor's fees; Postage; Water charges 4. Building cost write off If the building is under 25 years old you will be entitled to claim a deduction of 2.5% per year of the original cost of construction of the building for up to 40 years from the original date of construction. If you do not know the building cost you can contract a quantity surveyor to determine the building costs and prepare the depreciation schedules for the property and determine what can be claimed. This fee is tax deductible. Contact our office today for assistance.