When you are into business, no matter what industry it may be, one of your primary goals is to save on spending so you can maximise your income.
This is a given for those running a small business structure such as a real estate agency, where it can be manned by a lone agent or a group of agents. Nonetheless, the desire to save on costs is equal for all.
Small business owners can relate to this but tax time could surely bring out mixed emotions, either you hate it or love it.
Tax time can be a daunting and tiring period what with all the records for income and spending, piles of receipts and invoices, just to name a few.
But did you know that your business can save money from small business tax deductions?
Tax deductions can save you money
You’ve surely heard of stories about businesses not holding back on regular expenses and yet claiming tax deductions.
As a matter of fact, there are indeed legitimate deductions that you may not be aware of, so take the time to read through the article to find out what you can do.
A word of caution, though.
Some provisions may not be applicable in your local government, so make sure to verify it first with your local government or council.
You can also consult with the Australian Tax Office regarding tax deductions so you are aware of what you are entitled to.
Subcontractor and staff wages
This benefit covers salaries, wages, superannuation, commissions, and taxable fringe benefits for workers or employees in your business.
If you do not maintain office staff, you can also file a claim for contract labour such as work contracted for graphic designers, marketing consultants, virtual assistance, copywriters, etc.
This may also include tradespeople providing regular maintenance and repairs.
Office expenses
This generally applies to small businesses such as subscriptions for premium LinkedIn, Google Suite, cloud storage- any software used to run your business operations.
This includes accessories or appliances such as speakers, headsets, computers, video cameras, etc.
Freight and postage costs are also covered including office supplies such as paper, stamps, labels, envelopes, pens, and cleaning supplies.
You might be surprised that kitchen food and coffee supplies provided to employees and clients are widely tax-deductible, as well.
Marketing spending
You can claim tax deductions for costs incurred in promoting and advertising your business- online and traditional channels such as industry websites and hardcopy newspapers and magazines.
Printing costs for marketing collateral are also generally deductible, as well as corporate gifts, promotional products, branded merchandise and giveaways, clothing or uniforms with your business logo on them.
Subscriptions for email marketing resources, social media assistants, and search engine optimisation services are also included.
Training and business development
Business or career development training is not only beneficial for you, but spending incurred for it is deductible as well. Being a member of an industry-related association or group that can provide support to help you run your business is also tax-deductible.
The same applies to online upskilling and training for employees, as well as the cost for the use or purchase of instructional or training materials.
Insurance, business finance and legal costs
Fees and interests associated with loans such as those from banks, financial institutions, PayPal, etc. are business-related costs that are accepted and deductible, as long as you provide loan statements from the financier to include the fees and interests are covered in the filing of your tax returns.
Also, make sure to note down the costs in maintaining a bookkeeper, accountant and tax return submission as part of your tax deductions.
Depreciable assets
You can also file a tax deduction claim for office assets that are used in your business such as computers, printers, desks, bookshelves, and other furniture used in your business operations.
There is a different provision for motor vehicles used officially for your business, but make sure to consult with your accountant or the ATO on provisions regarding depreciable assets.
Expenses for travel
Since business trips have been cancelled due to the Coronavirus pandemic, travel expenses that were not refunded are entitled to tax deductions, such as airfare, taxi or bus fares, toll fees and train fares.
But make sure to check with the ATO or local tax office to determine which is which.
Home-based small business
This applies when you have a dedicated space where you hold an office which entitles you to claim deductions for occupancy expenses which include rent or mortgage interest, council rates, house insurance premiums and land taxes.
These are just some of the ways to help your small business save money, so make sure to reach out to the ATO or your accountant to help you determine the tax-deductible aspects that you are entitled to.