The number of small professional organizations (SMEs) has seen a huge rise in recent times. There are varied reasons for this; from people refusing to work under unjust corporate attitudes to various schemes that help smaller organizations. One of the particular trends that have been going strong for such organizations is the work from the home module.
Photographers, graphic designers, content creators, music producers, etc. who have their own organizations usually prefer to work from home. Organizations that house only a few employees or one-man organizations prefer to not rent out an office. Rather, they save that money by working from home. Because in today’s world it has been proven that professionalism holds more value than the look and feel of the organization.
But at the same time, there are downsides to it. Such individuals will probably not be able to set up a meeting with a client in their home-based workspace. And in the long run, this can lead to procrastination and curb organizational growth. But with this new scheme from the Australian government, such organizations will be able to build their own workspace and get a good amount of tax deduction on it.
So, if you are someone who lives in Australia and is a work from home professional, then this is good news for you. You get to up your professional game while also saving on the taxes. In this article, we discuss all the details about this scheme along with its requirements.
The scheme states that if any individual purchases a piece of property that costs less than $20,000 and puts it to use for professional purposes then they can claim a tax deduction from it. So, if you want to have your own separate workspace or expand your organization from one person to maybe three or four, this is the best time to get yourself a backyard cabin that can double down as your office.
How does this help you? Since this new asset will be considered for your professional purpose you will not be required to pay any taxes for it. This will help you save quite a bit of money that you can now channel into purchasing more professional goods. You will be easily able to get yourself a printer or photography equipment. Regardless of what your business is you can grow it with the help of this new scheme and achieve a higher level of professionalism.
This is easily the best way for a work from home professional to expand their horizon, and every such individual should take advantage of this scheme.
Qualifications for this deduction
- Your business needs to be tax registered. The claims you make upon buying this asset will have to be made through tax returns only.
- Your organization must have an annual turnover of less than $10 million. This scheme is meant for SMEs only, so larger organizations will not be able to avail it.
- The asset on which you make the tax deduction claim will have to cost less than $20,000. There is news that this threshold will be increased to $25,000. But as of now, only property below $20,000 qualifies for this tax deduction scheme.
- This asset will need to have been purchased in the year 2018-2019.
- The amount spent on the asset will have to be purely for professional purposes. There should also be no reimbursement made of any kind.
- You must be able to prove that this purchase is directly linked to your income module and you will also be required to produce a receipt.
- In case the asset you purchased includes both professional and personal usage, the tax deduction claim can only be made for the professional part of it.
For any further details get in touch with your tax accountant and ensure that your asset qualifies for this tax deduction scheme.
Importance of a backyard cabin
One of the most important factors for a work home employee is the availability of a personal space. While working from your bedroom may provide results, you will notice that a separate professional space will surely boost your productivity. Constantly working from your bedroom can lead to procrastination, lack of professional vision, and cloud your creativity.
Ensuring that your personal space and professional space does not co-exist will ensure that you get to bring in more equipment that does not clutter your living space, and it will also add a fresh touch to your professional surroundings. This is highly important since being in the ‘work zone’ will ensure that your thought process is truly professional.
This tax deduction scheme is the best way to ensure that you have a professional space to yourself. A backyard shed can easily be fitted into the $10,000 – $20,000 range depending on the size. Additionally, a backyard shed that doubles down as your office will allow you to expand your organization’s potential, hire more employees, and keep your personal space truly personal.
And the importance of this backyard cabin is now more than ever since it can ensure that you get to save a lot of money on it. This money can easily be used to once again grow your business in the preferred direction. So, if you have been meaning to grow your business but holding it off due to monetary pressure, this is the best time to do so. You will add a fresh capacity to your business, earn tax deductions, and once again channel it for professional purposes. And even if you are not meaning to grow your business, a backyard shed can be used as a storage space cum office, and you will still be able to avail of these tax deductions. Creating a workspace is absolutely necessary for all work from professionals and this is clearly the best time to do it. So, if you qualify the above parameters, get in touch with your tax consultant today.