The structure of your home-based business can impact what expenses you can claim. For examples:
- If you are trading as a Sole trader
As a sole trader, you are not considered a separate legal entity from your business. This means that you can claim deductions for home-based business expenses as an individual taxpayer. You may be able to claim a deduction for a portion of your home expenses, such as rent or mortgage interest, rates, and home insurance, based on the proportion of your home that is used for business purposes.
- If you are trading as a Partnerships
In a partnership, each partner is responsible for their own tax affairs. Like sole traders, partners can claim deductions for home-based business expenses based on the proportion of their home that is used for business purposes. However, it is important to note that partners cannot claim deductions for expenses that are not directly related to their own business.
- If you are trading as a Companies
As a separate legal entity, a company can claim a deduction for all expenses that are incurred in the course of running the business, including home-based business expenses. However, it is important to ensure that these expenses are directly related to the business and not of a private nature.
In all cases, it is important to keep accurate records of your business expenses and consult with a tax professional if you have any questions about what you can claim for home-based business expenses. This can help ensure that you are compliant with ATO guidelines and regulations.
It is always best to talk to your accountant and discuss your individual situation. Book your free consultation with one of our accountants today: https://www.seedplus.com.au/contact-for-an-appointment/
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