For a small business owner, taxes can cause anxiety and headaches. The last thing you want to do is give the government more of your hard-earned business profits.
As a business owner, you can take advantage of various tax-saving measures to lower your tax liability. Consider some of the options listed below if you need to boost your tax returns.
1. Understand What You Can Claim as a Business Owner
Business owners can deduct a wide range of expenses linked to running their company. You may be able to deduct the cost of internet access and the depreciation of a computer used to work on or track your business growth in addition to the cost of office supplies, business phone bills, and utilities.
Gather any receipts for expenses like monthly internet charges to figure out what you can claim.
Then, to establish the relevant part of costs, estimate the time you spend analyzing your firm’s growth instead of general use.
2. Work from Home Costs
Millions of Australians were made to work from home during the pandemic. The Tax Office offers a straightforward way to claim work-from-home expenses, with an 80-cent tax deduction for each hour done from home.
If you don't have a distinct work location, such as a home office or study, you can benefit from this deduction. The deduction has been extended to the current fiscal year, but you will need to keep records to back up your claim.
Prepare timesheets, rosters, a work diary, or other records like a spreadsheet to show the hours worked at home in the weeks ahead. To calculate the deduction, multiply the total hours by 80 cents. For example, you can claim $384 if you worked from home at 16 hours per week for a total of 30 weeks in 2020/21.
3. Travel Expenses
You can boost your business tax returns if you travel frequently. While business travel is entirely deductible, personal travel is not. But small business owners can combine personal travel with a justified business reason to maximize their business travel. Business-related frequent flier miles can be used for personal travel at a later date.
As a small business owner, you can increase your tax returns and work smartly with your money by planning and researching. A tax professional can give you more guidance and evaluate if you qualify for any of the returns mentioned above.