One of the benefits of having your own business is tax deductions. These provide you with extra savings you can use to re-invest in the expansion of your company. However, not everything you do is deductible. You have to follow limitations as to what you can deduct from your business tax.


Tax Deductibles

Managing your business finances properly is a must so that you can maximise your resources, save money and increase profits. One of the ways to achieve this goal is to use small business tax deductions in Australia. Not all your expenses are tax deductible; they have to meet the criteria set by the government. A deductible expense must be for business purposes. If it is mixed with private use, the only amount you can claim is the part used for your company.

It is important to document your expenses so that you have proof that the amount you spent was for business operations. Make it easier to monitor your finances by outsourcing accounting and bookkeeping tasks. Experienced freelance bookkeepers can do the documentation and your taxes for you.


Not Deductible Expenses

Learning how to maximise business tax deductions includes identifying which expenses are not deductible. Expenses such as entertainment, traffic violations, a purchase’s GST component that is claimable as GST credit, clothes for personal use, childcare expenses, your expenses for income earned from your hobby, and other similar expenses. The tax deductions you can get may have limits, if you provide personal services income or PSI.


Claiming Deductions

Before you can claim a deduction, you should identify the type of expense you incurred. You can make a claim for operation expenses during the year after incurring them. For investments on equipment and machinery, you will wait longer to get your deductibles. You don’t have to provide an invoice; however, you have to record these expenses to get the tax deductible. Another qualification for deductibles is that if the business expense is only for a certain period within a year, you can only make a claim for that timeframe.


Small business tax deductions in Australia allow you to save money. Identify the expenses where you can make a claim to get this benefit. Consult with your bookkeeper about possible tax deductibles. If you need assistance, you can review our services at Robookkeeper. We can provide you with experienced freelance accountants to do your bookkeeping for you.


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