Amid all the stress of tax season, one of the bright lights is tax deductions. Tax deductions allow you to deduct expenses from your taxes, such as business related expenses, that might have been made throughout the year. However, many Australian business owners aren’t getting all that they can from their tax deductions — simply because they don’t know about them or have forgotten about them. These tax deductions in particular often fly under the radar.
Does your business require you to drive from place to place? Whether you’re driving hours away on a lengthy errand or simply from one office to the next office 20 miles away, the mileage can add up — as can fuel costs. Good thing you can claim fuel costs and maintenance as a tax deduction, when it’s related to work. The ATO measures this deduction by the kilometres you drive on work related errands. You can’t deduct the cost of simply driving into work and home at the end of the day, but any driving errands related to work can and should be deducted.
Home Office Expenses
Work from home, whether full-time or a couple days a week? You can also claim your home office expenses as a deduction. This may be as simple as claiming personal computer costs or phone costs if you stay plugged into the office after hours or when you’re sick. If you work from home full-time, you can claim your software, any office equipment and furniture, as well as a percentage of your rent and utilities. This counts as an “occupancy cost,” much like you would be able to deduct an occupancy cost from an office space outside your home.
In some cases, you may be able to deduct clothing costs, such as having to buy a suit for a work related function, dry cleaning costs, and other potential cleaning costs. This deduction is a little tricky. You can’t just go to the store, buy a suit or dress that you like and say it’s “for work.” However, protective gear, office uniforms, or anything “occupation-specific” can be deducted. If you work outside, you can also claim the cost of sunscreen and hats.
Education and Development Expenses
Whether you attended a seminar this year or went back to school to learn more about your chosen vocation, these educational and developmental expenses can all be deducted come tax season. You can also deduct expenses from union costs or from the cost of membership to a business related association.
Although the thought may seem almost ironic, it’s true: you can deduct accounting expenses and other tax related expenses from your taxes. Just keep in mind that you’re claiming last year’s tax expenses on this year’s taxes, and next year you can claim this year’s tax expenses. After all, taxes are about looking back, rather than forward.
For more information, you can check out the ATO’s deductions page. Need help getting the most from your taxes this year? TCA Darwin can prepare taxes for individuals, partnerships, companies and trusts, as well as offering advice to business start-ups. Contact us today for more information.