Tax Tips for the Small Business Owner

Operating & running your own business can be very rewarding. It is always good to have a basic understanding of the compliance requirements set by the ATO. However, with rules constantly changing, it can be difficult to keep up and safely determine the claims that can be made within your industry benchmarks. Listed below are some suggested tax tips for your business that could lead to an increase in your tax refund without raising any ‘red flags’ in the eyes of the ATO.

1. Home Office Expense
   Home office refers to a separate room (such as a study) utilised in your home specifically for work purposes. This does not include a spare space in the lounge room or dining area. The ATO offers a set rate of 45 cents per hour to calculate the deductible amount this claim.
2. Travel Costs
   Travel can be necessary for business success and expansion. Where these expenses i.e. airfares, hotel accommodation, and car rental are incurred for genuine business purposes or events they can be claimed as deductions. Seminars and conference that relate directly to your business would be considered business events. Only a portion of food can be claimed as the ATO deems that this expense would have been incurred regardless.
3. Mobile Phone & Internet
   With technology advancing every day, mobile and internet usage become a necessary part of operating a business efficiently. They can form a significant cost in running your business. Similar to assets, even if there is private usage, the percentage relating to the business use of mobile and internet is still claimable.
4. Asset Purchases
   Equipment expenses such as computers, laptops, ipads, printers, and even company vehicles are tax-deductible, up to a certain amount. The amount deductible varies on each individual assets business use. For example, some assets may be used 100% for business purposes whereas others that are only 50% business use are restricted to claim only 50% of the total cost. Larger items are commonly required to be depreciated over time. Depending on the item, you can deduct the full cost in the year of purchase, or depreciate the asset several years. Currently, the government has allowed for Instant Asset Write Off of up to $20,000 for small business! This allows small business owners to claim the complete cost of most assets under $20,000 in the year of purchase. But be quick as this grant is planned to end 30th June 2017.
5. Tax Agent Fees
   That’s right! The fees paid to your tax agent, whether it be for business advice or the preparation of the tax return are 100% tax deductible. This includes costs incurred for business planning, cash flow preparation and more.

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About the Author

Trevor is one of the accountants at zimsen partners. Trevors goals for the firm invlove building friendly connections with our clients and to delivering quality services.

 

 

This article was produced by Zimsen Partners. It is intended to provide general information only in summary format on accounting, business advisory and taxation issues. It does not constitute accounting advice, and should not be relied on as such.