Tax Tips for Small Business
We touched on Tax Deductions for Individuals earlier, but now we want to help Small Businesses understand what Common Tax Deductions are available to them.
Are you claiming all the business tax deductions that you are entitled to?
There are many expenses common to most small business, and there are other expenses that are specific to the nature of each industry and the goods or services that your business provides.
Operating expenses include accounting, administration, advertising and marketing, office premises, office running expenses, trading stock, legal fees, repairs and maintenance, insurance and vehicle expenses.
Other operating expenses may include things specific to your business; for example, point of sale systems, freight, professional membership fees, professional education, protective equipment, tools or specialised software.
Employment expenses include salary and wages, fringe benefits, superannuation and training costs.
Capital expenses include machinery and equipment, vehicles, furniture and computers. Depreciation for these assets may also be deductible if the expense was not claimed immediately.
Expenses must relate to the running of the business and providing the goods or services that your business offers.
Some common expenses that are not deductible are fines and penalties, provisions for employee leave, donations to entities not registered as deductible gift recipients and some entertainment. Super and PAYGW are tax deductible when they are paid on time – but not if paid late!
Maximise Your Business Deductions
Remember to keep all your business records for at least five years, and payroll records for at least seven years. Companies must keep all records including director meeting minutes for at least seven years.
Preparing for your Tax Liabilities is essential, so you always have the funds to pay.
Also, don’t forget to check your business’s eligibility for concessions, offsets, incentives and rebates and make sure your business is calculating taxable income correctly, so you don’t pay more tax than you need to!
