If you’re self-employed and work from home you’re entitled to deduct some of your home expenses to reduce your tax. But take care that both yourself and your accountant don’t spend hours figuring out the deduction each year.
The simplest method of making a claim is using Inland Revenue’s square metre rate method (as an alternative to recording a portion of all your actual household expenses). The allowable deduction has just been made public for the 2023-2024 year - $53.10 per square metre of home office area, up from the 2022-2023 year which was $51.05.
On top of this you can also claim a percentage of your mortgage interest, rates or rent based on the percentage of floor area used for the business.
Square Metre Rate method may not result in the largest possible home office deduction, but I like it because it is quick and easy to calculate and does not require extensive record keeping.
About Warren Hardie
Recently, WH Accounting & Advisory opened a branch on the Kapiti Coast. Warren Hardie has connected with this part of New Zealand his whole life, having been raised in Wellington and regularly holidaying at the family bach at Waikanae Beach
Contact Warren via the website https://whaa.co.nz/
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