Most owners use one phone and one internet connection for everything. The ATO's position is simple: you can claim only the work-related share, and you need records to support it.
Work out your business percentage
If you have an itemised bill, your work percentage can be based on the share of calls, call time or data used for work, plus any extra costs you incur because of that work use. If you do not have an itemised bill, keep a record of work and private calls and internet use over a continuous four week period, then apply a reasonable basis to the rest of the year.
A four week diary only works for the full year if your work use is fairly consistent. Otherwise, keep records for the whole year.
Watch the common traps
- Capped plans: a capped plan does not let you claim business and private use in full. Unless you use the service only for work, you have to apportion.
- Installation and set up costs: the ATO says you cannot claim a deduction for these.
- Fixed rate home office method: if you use it, phone and internet costs are already covered by the rate, so you cannot claim them again.
What to keep
- Bills showing the amount you paid.
- Your diary or other records showing how you calculated the work percentage.
- Photos of receipts, as the ATO accepts digital records.
For home based business expenses, the ATO says to keep records for at least five years to show that the business incurred the expense and how you calculated the claim.
What to do this week
Pick a typical four week stretch, note your business and personal use, and save the result with your bills. If usage swings between busy and quiet months, ask your accountant about tracking the whole year.
This tip is general information only and does not take your circumstances into account. Check the ATO website or speak to a registered tax professional about your situation.