Updated: Jul 21, 2021
It's easy to overlook the importance of tax time as a small business owner. But paying due diligence to your financials could save you thousands and pay off in the long run. While we're not tax experts, we always try to look out for small businesses, and have many SME clients.
There's a trifecta criteria when it comes to what you can claim as a valid business tax deduction:
Rule 1: The expense must be for business use, not for your personal or private use.
Rule 2: If the expense is a mix of business and private use, you can only claim the amount for the business portion.
Rule 3: You must have records that can prove it (receipts, invoices etc.)
As a bonus. here are a few tax deductions commonly overlooked by small business owners:
1. Review Asset Acquisition
If you need new business assets, now could be a good time to purchase them. They can be brand-new or second hand but must relate to your business, and must be ready and installed by June 30. This year the asset write-off threshold increased from $30,000 to $150,000 per asset.
2. Cost of managing your tax affairs
When you own a business, getting your taxes in order can be costly. If you used a tax agent to lodge your tax return last year, you an claim the amount you paid on this years return. Simply put the amount that you paid into section D10 - Cost of managing tax affairs, and they may be tax deductible.
3. Business travel expenses
While many people didn't travel as much this year, you're still able to claim business airfares, train, tram, bus or taxi fares, and car hire costs in your return. This also applies to accommodation and meals for overnight travel.
Any further questions? Contact us via email or phone today!