Tax time is upon us again and can be overwhelming and stressful as a business owner. But it shouldn’t be something you dread every year, being organised and proactive during the year can make lodging your tax return a breeze.
According to Xero Australia 67% of small business owners find tax season to be very stressful. Here are five tax tips we forget or take for granted all to often, but if we follow them, tax time will be considerably more bearable this year.
1. Document Everything
Better be safe than sorry when it comes to documenting a record of daily transactions. Make it as detailed as possible, enlist the help from a smartphone apps that track spending, scan receipts and back up files this way you verify business expenses.
2. Donation Receipts
Did you know donations over $2.00 to recognized charities are tax deductible so being generous can pay off. Just remember to ask for a receipt every time you donate and keep these receipts in a safe place.
3. Maximise your Deductions
The easiest way to save money for a small business is be aware of what deduction and offsets you can claim. Work-related items bought before June 30 can become a quick deduction, and the Australian Taxation Office publishes guides for specific occupations. It has almost 40 different guides, so be sure to find the one that matches your occupation. Here are some of the common tax write-offs and rebates you can report to reduce taxable income:
• Office costs (if you run your business from home, this can be very beneficial as a small business owner)
• Travel & entertainment (including meals, airfare, auto costs and lodging)
• Clothing (including laundry and dry-cleaning expenses of uniforms)
• Health insurance (depending on your income level)
• Medical expenses
4. Union / Professional Fees
If you belong to a union or a membership body that is related to your profession and you pay annual fees to be a member, then you can claim the total cost of these fees as a tax deduction.
5. Enlist help from a Professional
Don’t be afraid to get professional help especially as a business owner, after all their fees are also tax deductible. Committing a mistake could cost you and your business more time and money. They can give you assistance in getting the most out of your tax return and make the whole process smoother and less stressful.
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