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Tax deduction for Spouses home office expenses

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Newbie

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I own the property where me and my wife live. She has recently started her own company, which she fully operates from a dedicated home office she has set up in our residence.

 

My questions are:

-Assuming she qualifies for home office deductions (ncluding running costs), would she be able to claim them given that the utilities / home loan / bodycorp are listed in my name? 

-Should those tax deduction claims be submitted by her or by myself?

 

Thank you

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Most helpful response

Taxicorn

Replies 0

@vasko567 

 

Any expenses should be claimed by your spouse regardless of who's name is on the utility bills.

 

The ATO view spouses expenses are joint regardless of whose name is on the bills.

 

Make sure that she works out the exact area that the office occupies v the whole house area eg 20m2 / 200m2 = 10%.

This will enable her to work out the exact running costs of the office.

 

This provides more information of what can be claimed and how.

https://www.ato.gov.au/uploadedFiles/Content/MEI/Downloads/TaxTimeToolkit_SB_home-based-business.pdf

 

Also, be aware that if you own the property you will be liable for Capital Gains Tax when you sell it:

 

(Number of days running a business/number of days owned property) x the above % of the house used for business.

This will then be multiplied by the selling price x  the adjusted cost base.

Then finally x 50% (owned more than 12 months).

This will be the total amount, you then divide it by the number of owners on the title.

 

 

1 REPLY 1
Highlighted

Most helpful response

Taxicorn

Replies 0

@vasko567 

 

Any expenses should be claimed by your spouse regardless of who's name is on the utility bills.

 

The ATO view spouses expenses are joint regardless of whose name is on the bills.

 

Make sure that she works out the exact area that the office occupies v the whole house area eg 20m2 / 200m2 = 10%.

This will enable her to work out the exact running costs of the office.

 

This provides more information of what can be claimed and how.

https://www.ato.gov.au/uploadedFiles/Content/MEI/Downloads/TaxTimeToolkit_SB_home-based-business.pdf

 

Also, be aware that if you own the property you will be liable for Capital Gains Tax when you sell it:

 

(Number of days running a business/number of days owned property) x the above % of the house used for business.

This will then be multiplied by the selling price x  the adjusted cost base.

Then finally x 50% (owned more than 12 months).

This will be the total amount, you then divide it by the number of owners on the title.