Home – New Forums Money matters Recording Home Office Expenses

  • This topic is empty.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • #988515
    fanix
    Member
    • Total posts: 43
    Up
    0
    ::

    Hi,

    I recently moved into a 2bedroom apartment. One room is setup for my home office and business needs.

    Ive done some reading on ATO website and I’m elligible to claim Occupancy expenses and running costs(gas,elec,internet etc).

    My question is, how do I record these expenses in my accounting software, if any? For instance, today I have to pay $179.00 for TPG setup costs. The TPG account is in my personal name and I paid using my personal credit card. Do I record this in my accounting software as an expensive, or should I for future use change the billing information with TPG so that it deducts the monthly costs from my business account?

    Thank you

    #1167540
    NickKaro
    Member
    • Total posts: 226
    Up
    0
    ::

    Hi Finamic

    Unless the expenses are used solely in connection with deriving business income, you will need to apportion the expense between private and business use – thereby only claiming the business proportion for tax purposes.

    If you are running the business as a sole trader, it does not matter which account is used to pay for the expenses. If using a company, you should reimburse your personal account from the company to the extent that the expense relates to business use.

    Remember that there may be capital gains tax implications from running a business and claiming occupancy expenses in your main residence (i.e. you lose part of the main residence exemption from capital gains tax).

    Hope that helps.

    Nick

    #1167541
    Past-Member
    Member
    • Total posts: 1,815
    Up
    0
    ::

    As a sole trader you need to apportion your expenses.
    Here are two examples: One is electricity, one is petrol.
    For example, you can use 3 lines in each transaction to make it easier and you can use Spend Money or Purchase and Payment method.
    In these examples, Fuel is 55% personal and 45% business.
    Electricity is 50% each.

    Use one line as the total bill.
    One line as the ‘Drawings’.
    One line rebated back to the bill which matches the Drawings. It’s always minus or typed in within brackets which become a minus. The bill should balance.

    See example images.
    One is paid from a cheque account, one from a credit card. They both work similarly. This way all the personal drawings are done as one goes along.

    Hope they help.

    #1167542
    fanix
    Member
    • Total posts: 43
    Up
    0
    ::

    Thanks for all the feedback! Very useful.

Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.