We all work hard for an income and losing part of it each year to the tax office always hurts a little. Around this time of year, we are inundated with information about the taxation system, minimising costs and where our money goes. However, this advice often caters to large businesses or individuals, and small-business owners get lost in the mix.
We have therefore compiled a list of the top four tips to help small-business owners get the best return on their tax during tax time.
The best thing that you can do for yourself and your tax return is to keep your receipts for any business-related expenses. It’s better to have extra records that you can’t claim than to miss out on hundreds or thousands of dollars because you didn’t keep hold of your receipts. Putting aside five minutes each week to download statements and collect your receipts saves a lot of time when it comes to tax returns. Better yet, use technology to your advantage with programs such as the Etax mobile app to save all of your receipts into your account or other record keeping apps that can then be accessed by your tax agent when needed.
Lodging taxes yourself can be a stressful and time-consuming task for small-business owners. Making use of a certified online tax agent like Etax can relieve pressure and save time as it means you can conveniently lodge your taxes online from any location or device and a qualified expert will cross check your claim to make sure its above board. This leaves you with more time to handle more important matters when it comes to running your business.
Many small businesses are run out of home offices, so knowing what to claim is crucial. Your wifi, laptop, stationery, office furniture, heating, cleaning and many other common expenses that are used both in-home and for business can be claimed back from your taxes. You are also able to claim the percentage of your phone bill that is required for work, and claim depreciation costs for business use of any asset expected to decline in value over the time it’s used. The instant asset write-off means you can deduct business assets that cost less than $20,000 in the year that you buy and use them.
Travel is an unavoidable part of work and can often be expensive. However, small-business owners are able to claim back many of these occupational travel expenses. If you use your car for work, travel between offices, to clients, or drive to run operations you can likely claim back the personal cost of using your car. You are able to claim back 68 cents per work-related kilometere and up to 5000km per year in travel costs. You can also claim miscellaneous travel expenses such as hotel stays for work trips, car hire, flights, public transport fares and even food on business trips away from home. You must be able to justify expenses if required by the ATO, so keep all travel receipts for evidence.
Ashley Debenham, Etax.com.au