There are only three things constant in this world – death, change, and taxes – and none of them is attractive. Take tax, for example. Taxes are deductions to business income, which can potentially hurt profit and cash flow. The money you pay for them are the ones you have a hard time letting go.
But there’s a silver lining. If you’re running a business, you can claim many deductions to lower your tax payable.
These include the following:
You can claim the running costs associated with doing business if you use your personal vehicle. If you are an employer and your employees use their cars to work, you can also deduct your taxes based on the corresponding mileage rate. Travelling for business? Keep a diary and invoices to be legible for the tax deduction.
As long as the clothing is a uniform, bears the name of the business, or is necessary for safety and health, you can claim clothing expenses against your tax payable.
The taxation rules for home and mixed asset use are confusing and complicated. You may require the help of tax consultants at Accounting North Ltd. But just to give you an idea, you can’t deduct home expenses if the property is meant for long-term rental or the business asset is used once per year or less.
Depreciation is an expense, which already reduces your taxable income. There are different depreciation rates depending on the assets, and usually assets valued $500 or less are no longer depreciated.
You may claim full deductions for the food and drink served in promotions or launches, as well as conferences, provided they still have the corresponding receipts and invoices.
Tax deductions are meant to give you more income, but taxation is complex. Rather than run the risk of disappointing the tax man, call tax consultants when in doubt.