Do You Operate Part Or All Of Your Business From Home?
You may be eligible to deduct occupancy costs and the running expenditures associated with using your home’s facilities for business purposes (what you pay to own or rent your home) if you operate in a partnership or as a sole trader.
For instance, Stella is a sole trader who operates a hair salon out of her grandmother’s house. She maintains thorough, accurate, and extensive records, detailing everything from depreciating equipment and assets to separating personal use from corporate use. This implies she has various options to pick from when determining the operational costs she can deduct for the fiscal year 2021–2022.
Here they are:
- She may employ this temporary workaround until June 30, 2022.
- Fifty-two cents per hour fixed rate method includes cleaning, furniture and furnishings depreciation, lighting, heating, and cooling.
- Actual cost method supported by receipts.
Stella also determines occupancy costs, such as mortgage interest, council rates, and home insurance premiums, based on the percentage of the floor area and the amount of time it was utilised for business because her home salon has the characteristics of a place of business.
You should have an actual, market-rate rental contract (or comparable agreement) with the property owner if your firm is a company or a trust and you conduct some or all of your business operations from home. Which expenditures you pay for and can deduct will depend on this.
Conclusion
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