Top expenses to claim in your small business

Some small business expenses can seem irrelevant or inappropriate to include when you’re doing taxes but you can’t afford not to consider every legal possibility. Including certain business deductions could mean the difference between owing a tax bill and receiving a tax refund.

One thing you can do to make sure you don’t miss deductible expenses is to highlight them in your accounting software, or you can make a list of expense categories that you plan to itemise on your taxes in a document.

Whatever you do, don’t leave money on the table, make sure you’re claiming these small business expenses:

Vehicle Expenses

Whether you’re working from a shop, an office, or out of your garage, don’t forget to tally all those business related trips you take with your car. It’s easy to do, particularly if don’t use your car very often for business purposes, but keeping track of all of your business related mileage can make a real difference come tax time.

The Australian Taxation Office (ATO) also allows a standard deductible amount that you may qualify for and in some cases you may also be able to claim parking fees.

Percent of Rent Payment

You don’t have to be a homeowner to deduct a home office deduction. The costs associated with “housing” your home office are valid small business expenses that you should include when filing your taxes. The office has to be exclusively used for work purposes and not for personal use. Your accountant can help you with the exceptions to that.

You’ll have to figure out the total square feet of your house, and then the square feet of your home office. Divide the latter by the former, and convert that number into a percentage. Multiply your total rent amount by the percent and you’ll have the amount to work with for a tax deduction.

Shipping Expenses

Keep track of your shipping expenses related to the products you send to customers. Those expenses are related to your cost of goods sold and are generally deductible. For example, if you sell books on Amazon, then you should keep records of the actual costs of each package you ship. Categorise it as one of the small business expenses that you can include the next time you prepare your tax returns.

Bank Fees and Charges

You should consider finding a bank that offers free business and personal checking accounts and charges a low fee for other services. If your current bank charges you a monthly maintenance fee though, keep records of it for tax deduction purposes. Bank charges are considered small business expenses that you can deduct on your taxes. You may also be able to deduct overdraft fees and other penalties that you were charged by your bank.

Don’t miss out on tax savings the next time you file your taxes. You’ll need every dollar you can save to make a living and grow your business successfully. There are some really good options for bookkeeping and accounting software to help you deduct small business expenses.

Tax related expenses
Costs associated with preparing your tax return, including having a bookkeeper or accountant prepare your business records, is another deduction.

Operating a website

Costs for operating a commercial website such as site maintenance, content updating, and Internet service provider fees, are all deductible.

Prepay Expenses

Prepaying your expenses will generate an immediate tax deduction. Prepaying expenses that cover a period of no more than 12 months out is a great way to bring forward operating expenses before 30th June.

Examples of items you can prepay include rent, insurance, repairs to business assets, subscriptions, business trips, seminars and conference bookings, leases, and phone and Internet services.

Need help. Call us for a free bookkeeping analysis today on 1300 900 938 or email us here.


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