Are you getting confused about what business expenses you can claim for your business to save more? When you prepare for tax returns, it might be tricky and challenging to know what tax deductions you can claim. Many business owners don’t know what tax deductions they are eligible for, that’s why they seek help from a small business accountant in Melbourne because they carry in-depth knowledge about tax matters. In today’s blog, we’ll discuss some things you can claim to save more on your business taxes.
What tax deductions you can claim using a tax accountant in Melbourne?
You can claim those expenses that incur in when operating your business, which means if they are directly related to earning assessable income. The following are types of expenses you can claim as deductions:
Motor vehicle expenses
The best small business accountant in Melbourne knows everything about tax deductions. As a business owner, you are allowed to claim a tax deduction for motor vehicle expenses used in running your business. You can claim:
- oil and fuel
- servicing and repairs
- insurance cover premiums
- lease payments
- interest on a motor vehicle loan
Home-based business expenses
As the name suggests a home-based business is one where an area of your home is used for business purposes. These types of expenses will depend on how you operate your business from home. Accountants in Melbourne can claim tax deductions for the business part of your expenses. These deductions will include:
- occupancy expenses
- running expenses
- the expenses of motor vehicle trips between your home and other places, if the trip is for business.
Business travel expenses
If you or your employee are travelling for business, then you are eligible to claim such deductions. Expenses you can claim include:
- tram, train, taxi, bus, or ride-sourcing fares
- cost of hiring a car and the expenses you incur while using a hire car for business
- if you are away overnight, then it will include meals
Digital product expenses
You are allowed to claim deductions for the expenses of digital products used in running your business. Basically, you can claim two types of expenses, such as capital expenses and operating expenses. You need to have a record to show the portion of your expenses used for business purposes.
Super contributions, workers’ wages and salaries
As a business owner, you are permitted to claim tax deductions for :
- workers’ wages and salaries that you pay
- super contributions you make to a complying super fund or retirement savings account (RSA) for contractors and employees.
Wage and salary expenses fall in the category of operating expenses. Being a sole trader, you can claim deductions for your own super contributions in your tax return. Apart from this, make sure to keep a record of everything and this is where you can opt for bookkeeping services in Australia.
Repairs, maintenance and replacement expenses
You can claim expenses for maintenance, repairs or replacement, including:
- conditioning gutters
- mending leaks
- repairing machinery
- repairing electrical appliances
- maintaining plumbing
- replacing damaged or broken glass in windows or broken parts of fences
What you are not allowed to claim?
Some expenses are not deductible, such as:
- traffic fines
- expenses related to entertainment, other than those you offer as a fringe benefit
- domestic or private expenses, such as clothes for your family members or childcare fees
- expenses related to earning income, which is not assessable
- the GST element of purchase if you can claim it as a GST credit on your BAS.
The above-mentioned are a few expenses you are not allowed to claim as tax deductions because they are not tax deductible.
Claiming tax deductions needs a lot of knowledge and most often, business owners don’t know how to claim those deductions. Due to this fact, it is suggested to get help from the best tax accountants. For further information and help, you can get in touch with Reliable Melbourne Accountants.