Just like the other businesses, you can also avail tax deductions for your work from home job. Basically, you can avail all the deductions that an SME can avail. The tax deductions can be classified into two major categories.
Parts of home used for business
The rent, mortgage interest, council rates, home insurance premium and the land taxes are collectively called as the occupancy expenses. You can claim the occupancy expenses, if you pass the deductibility test. You must have an area in your house that is set aside for the business alone and there should be a sign in front of your house that indicates that you are performing a business at home. There are a few factors of the ATO which indicates whether the area should be used for domestic purposes and how often it should be visited by the clients.
Cost of performing the business
You can deduct the expenses that you incur in running the business from home. This includes the bills for gas, heating, lighting, equipments like chairs, shelves, computer and also the depreciation for the same. The cleaning costs, cost of curtains, light fittings and carpets are also deductible.
You can claim the expenses above said for the area in which you conduct the business, alone. This can be calculated by using the floor area that you are using as your office. For instance, if the floor area of the office is 20% of the floor area of the house, you can claim for 20% of the above said costs.
If you have not set aside a separate place for your office, you can get yourself audited by the ATO to check whether you are eligible for applying the deductions. It is also important to make a note of the increase in the expenses for the sake of the business. The best example is your phone bill.
You can also use another method of deducting 34 cents for every hour you work at your home. This would include the heating, lighting and the furniture deductions alone. You need to calculate the other utility like the internet and phone, separately. You can also include the wear and tear of the equipments.
Keep track of all the equipments and resources that are used for the business. This would help you to calculate the deductions, easily. If not possible, you can also avail the help of professionals who would help you to file the deduction in the most economic way.