What Can You Claim if You Run a Home Based Business or Clinic?
- johnry8
- 5 days ago
- 2 min read
More Australians are running businesses and clinics from home than ever before. Whether you are a consultant, a health professional or a small business owner, working from home can save you money on rent and travel. But it also comes with a big question. What expenses can you claim at tax time?
1. What Counts as a Home Based Business?
A home based business or clinic is one that operates partly or fully from your residential address. This could mean using a spare room as an office, converting your garage into a workspace or setting up a treatment room for clients. The key is that the space is used for business purposes.
2. What Expenses Can You Claim?
Running a business or clinic from home often means you are entitled to claim part of your household costs. Some common expenses include:
Electricity and gas
Internet and phone bills
Office furniture and equipment
Cleaning and repairs for the business area of your home
Depreciation on assets like computers and treatment equipment
Tip: The amount you can claim depends on how much of your home is used for business and how often.
3. How Do You Work Out the Claim?
There are a few ways to calculate your deduction:
Actual Cost Method You track your actual expenses and claim the portion that relates to your business. This requires careful record keeping but often results in higher deductions.
Fixed Rate Method You use a set rate per hour for every hour you work from home. This is simpler but limits the amount you can claim and may give a smaller deduction.
Best practice: Keep a diary of the hours you use your home for business. This can be used as evidence if the ATO asks questions.
4. What Mistakes Should You Avoid?
Claiming personal expenses as business costs. For example, you cannot claim the cost of your entire internet bill if you also use it for personal purposes.
Forgetting to update your records if your business grows and takes up more space in your home.
Overlooking depreciation on business assets which can add up to a large deduction over time.
Do you want to make sure you are claiming everything you are entitled to when running a home-based business or clinic?