When considering deductions, keep in mind you can claim most expenses you spend in genuinely running your business. Although, different businesses will have different costs associated with them and in some cases a different treatment of these (for example, claimed over time), there are common expenses you should make sure you’ve not missed. If in doubt, keep the receipt and ask your accountant – there are no silly questions !!!
Most businesses have day to day operating expenses like the costs of stationery, materials, advertising, bank charges, insurance and wages. Also perhaps website expenses such as registration, web hosting, and licensing fees may be claimable (and can have different tax treatments depending on the circumstances)
You can also claim business premises costs such as electricity, phone, water, rental or lease. Alternatively, if you run your business at your home or your business is based from home, you can claim home based business costs. However, you can only claim the business portion of occupancy expenses and running expenses, like mortgage and electricity. In some cases, however, using your home as your place of business can result in capital gains tax being payable when you sell, so you should discuss this with your tax agent first, if you are considering this.
Do you or your employees travel for business? You can claim business travel expenses such as bus, plane, Über or taxi trips– but remember to keep the receipts. If you have a car for your business, you can claim motor vehicle expenses associated with running and maintaining the car such as petrol, rego and insurance. You can also claim the car itself, but usually that’s over a period of time.
For all expenses, you should consider:
- If it is for a mix of business and private use, only claim the portion that is related to your business.
- You must have records to prove it. Whether it’s paper or electronic it’s important to have a record like a receipt for your business expenses. You’ll also need to show how you calculated the business portion of expenses, if that applies to the expense.
There are a range of tax concessions that your small business might be eligible for, but here are a few you should consider for your 2018 tax return:
- $20,000 instant asset write off – if you’ve bought or intend to buy business assets before 1 July. To write them off in your 2018 tax return, make sure you bought and installed them before 30 June and are using the “simpler depreciation rules”.
- Simplified trading stock rules – If you estimate that the difference between your opening and closing trading stock is $5,000 or less, you don’t need to do a stocktake. Instead, you can include the same amount for your opening and closing stock in this year’s tax return.
- Pre-paid expenses – You may be able to claim a deduction this year if you prepay an expense that will end in the next financial year, for example the rent for your business premises or an insurance policy. This is subject to rules and conditions, you should discuss with your tax agent before making this payment.
- Small business income tax offset – You can get an offset of up to $1,000 if you are a small business sole trader, or have a share of net small business income from a partnership or trust