Tax Agent Perth
Unit 2, 200 Adelaide Terrace, Perth WA 6004, Australia
Running a business effectively and successfully involves a proper planning and infrastructure. You have to bear costs like staff wages, travel expenses, business finance costs, marketing costs etc. Whatsoever, you can always claim tax deductions over these expenses. Obviously, you cannot claim everything. You’ll have to abide by certain rules and regulations. Before going into details, one thing you should always remember that, you cannot claim private expenses.
In Australia, you can claim most of your business expenses as tax deductions in order to reduce your taxable income. According to the standard formula followed by Australian Taxation Office or ATO, calculation of taxable income is done by deducting tax from assessable income. This assessable income i.e. the revenue that you get most from running your business is subject to tax.
While filing for the deductions, you should remember that:
The Australian government gives tax relaxations for small business. It recently introduced additional tax relief for businesses that are just beginning, resulting in reduction of huge tax burden for small business owners. If you wish to start a small business, you can get some immediate deductions from accounting and legal expenses and also other government taxes and charges, according to the new tax relief scheme. For more information on small business tax return, you can consult with tax agents. The expenses that you can claim deductions for your business are as follows:
Travel expenses generally include airfares, ride fares (which may be train, bus or car), car hiring fares and the costs for using a hired car like fuel rates, car parking charges or toll taxes and obviously, accommodation fares. Meal fares can be claimed if you stay somewhere for a night. However, to get tax deduction on expenses taken for an overnight stay, you must own a permanent home elsewhere and you need to stay away from there while taking the business trip.
If it’s not you, but your employees travel for business, you can pay for their expenses in three different ways. You can pay directly from the business account, you can pay your employee a travel allowance or you may give them a reimbursement against all their expenses. Paying travel allowance and reimbursement has an added benefit and that is, you can get Fringe Benefits Tax (FBT) liabilities.
Various motor vehicle expenses include fuel and oil prices, repairing and servicing charges, motor vehicle loan interest rates, registration fees, lease payments and also insurance premiums. In case you use the motor vehicle for both private as well as business purposes, remember that, you must be able to identify and justify the amount you used for business purposes only.
There remain other expenses too, like electricity, phone, necessary equipments, repairing of furniture and cleaning purposes. You will be glad to know that, these expenses are also deductible. And, last but not the least, you can claim for motor vehicle expenses against the transport fare you use to go from your home-based office to other places for business.
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There are two types of expenses. One is, operating expenses that include office stationary charges and wages. For this, you may claim the deduction in the year you incur them. Another type of expenses is capital expenses that include charges on machinery and equipment. You can claim these expenses over a longer period.
For different business structures (like partnerships, trusts or companies), modes of tax deduction claim also differ. For more information and queries regarding small business income tax return, you may consult with any tax agent in Perth or anywhere else in Australia. Apart from that, you will find plenty of information available on the internet too.