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Starting / Working from home

Guard dogs and your home-based business

Dogs can provide more than just company for home-based soloists. They can protect your assets and may even count as a tax deduction.

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Many people who run home-based businesses aren’t at home all the time or may also work a day job, which can leave them vulnerable to theft. If you have a shed full of expensive tools, or a back room full of business stock, leaving it unattended for eight hours a day with no security is not a smart business move.

A guard dog purchased to provide security over a business plant and equipment is classed as an asset to your business and is therefore tax deductible over its useful life as a capital item. The capital cost of the guard dog would include the initial purchase price of the dog and the training costs.

Ongoing expenditure for looking after your guard dog will also be tax deductible. This includes things like food, shelter and vet expenses.

It is important to remember that because you store your business assets in and at your home, the guard dog will also provide protection to your personal assets. Therefore it may be necessary for you to apportion your expenses between the business function provided by the dog and the private function provided by the dog.

"I doubt very much that the family poodle is going to satisfy the tax man regardless of how loud it can bark. "

You will also need to make sure the dog is a genuine guard dog. I doubt very much that the family poodle is going to satisfy the tax man regardless of how loud it can bark. The tax office will be looking very closely at the breed of the dog and the specialised training it has been given in the event of an audit.

Want more articles like this? Check out the working from home section.

If you are unsure or worried about whether or not your dog satisfies the tax office guidelines for a guard dog, then I suggest submitting a private ruling to the ATO. That way you can get a yes or no answer from the tax experts based on your particular circumstances.

No matter what kind of home-based business you run, it’s wise to undertake a security review as part of a broader risk-management strategy. Then you can decide on the best protection for your business and your family. If you’ve got small children then a guard dog may not be the best option for you and you might need to explore your other options. Regardless of the choice you make, protecting your business assets is a worthwhile investment and sure beats being a victim of theft.

Have you considered claiming your guard dog as a tax deduction?

Read more tax deduction tips for home-based businesses.

Jasmine Kidd

is a FCPA and registered tax agent who specialises in small business, superannuation, property tax and salary tax law. She is also the director of Online Tax Solutions.

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