As a Sole Trader, keeping accurate records of your home office use is crucial for maximising your deductions. The Home Office Diary in TaxTank makes it simple to manage and log expenses under the Fixed Rate, Actual Cost, or Occupancy Method.
Quick links:
Fixed Rate Method
The Fixed Rate Method is based entirely on the hours you work from home, making it quick and easy to use.
Steps to Use the Fixed Rate Method:
Navigate to the Home Office tab in the Work Tank.
Select the Fixed Rate Method: Go to the dropdown menu and choose the Fixed Rate Method.
Add Your Work Hours: Click 'Add Log' and enter the hours worked each time. Your total hours will automatically update, and TaxTank will multiply them by the ATO’s hourly rate to calculate your deduction.
Starting with an Existing Logbook?
If you've been using TaxTank to record your home office hours, as soon as you select a method in the home office diary we will automatically move those entries to the home office diary logbook.
If you have prior records outside of TaxTank, you can add them as one entry (like an "opening balance") instead of adding each past log separately. For safekeeping, store a copy of your old logbook in the Spare Tank.
Need to export your Logbook?: To create an exportable record of your hours in excel, simply click the Export button.
Note: When you select this method, running costs (e.g., electricity, internet) are not claimable separately and are set to 0% in the expense categories.
Hint: Logging hours consistently throughout the year ensures you capture every deduction. Whilst the logbook only updates the Fixed Rate method in TaxTank, You can keep a logbook using any of the methods.
Actual Cost Method
The Actual Cost Method allows you to claim individual home office expenses based on your work-related usage. With Work Tank, you can set the percentage for each category, and TaxTank handles the rest.
Steps to Use the Actual Cost Method:
Select the Actual Cost Method: Choose this option from the dropdown menu.
Set Claim Percentages: For each expense category (electricity, internet, phone, etc.), adjust the sliders to match your work-related use, from 0% to 100%. Click Update to save your settings.
Note: Once you select the Actual Method and set you claim percentage for each category, we will automatically update any existing expense claims in TaxTank to ensure accuracy and consistency.
Automated Allocation from Bank Feeds: Once your claim percentages are set, any allocations made from live bank feeds or rules you set will apply the correct percentages automatically.
Hint: If your work situation changes, simply adjust the sliders, click Update, and TaxTank will refresh all allocated expenses for the financial year. Also, continue to log your hours for added accuracy, as this allows you to switch between methods and choose the one with the largest deduction.
Occupancy Method
If you have a dedicated home office, workshop or storage area for you business, the Occupancy Method allows you to claim a portion of both occupancy and running costs, ideal for Sole Traders with higher home and running expenses.
Steps to Use the Occupancy Method:
Select the Occupancy Method: Choose this in the dropdown menu.
Calculate Occupancy Expenses: Click the calculator icon to determine your home office occupancy claim. Enter the square meters of your home and office areas, along with the reasonable percentage of business use (if not exclusively for business), and we'll do the rest. If anything changes, simply update the details, and all allocated claims for that financial year will adjust automatically.
Note: You can claim all expenses related to the Actual Cost Method for Occupancy. Just set the sliders for running expenses (e.g., mobile, internet, phone) based on your business usage.
Bank Feed Accuracy: TaxTank will automatically apply your occupancy and running expense percentages to bank feed allocations, ensuring accurate claims.
Hint: Tracking your usage year-round in TaxTank helps capture every eligible deduction while keeping your records up-to-date for stress-free tax time!
Not sure which method to use? Check out this article for more information about the different methods and the ATO rules.