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Working from home? Save on your tax

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There is something about becoming a parent that seems to inspire an entrepreneurial streak in some people.

Whether it’s from a desire to stay home with the kids, or a realisation that it’s important to follow your dreams, lots of new parents are choosing to work for themselves. Just look at the boom in businesses such as Doterra and Jamberry.

If you’re running a small business from home, you may think things like tax deductions do not apply to you.

But the good news is, if you have an intention to make a profit,  then small businesses can claim some of their expenses – and in doing so, minimise their tax bill.

Here are some things to think about claiming as expenses against your income when you do your tax return.

–          A portion of the rent or mortgage interest on your house.

–          A portion of your power bill, broadband rates and insurance.

–          The running costs of your car (you may need to do a logbook for this).

–          Any stationery that you use in the course of your business.

–          The cost of any samples you use to show your customers.

–          Postage costs.

–          Fifty per cent of your entertainment costs if you take clients or customers out to try to win their business, or if you provide snacks for product parties.

–          A proportion of your insurance bill.

–          The cost of any advertising you do, even if it’s just an occasional Facebook ad.

–          Accommodation and food costs if you travel out of town for a conference or convention with your business.

 

If you’re unsure, get advice specific to your situation contact a good accountant who specialises in small business. It’s our job to make this stuff easy.

  • Jeremy Tauri is an associate at Plus Chartered Accountants.