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Tax season always seems to creep up on us so quickly! Tax time is only a few months away. As an employer, there are some things you can get organised now so you don’t miss out on claiming what you’re entitled to.
Be prepared - don't miss the opportunity to reduce the tax you pay in order to maximise your income.
Deductions for salary and wages
If you're in business as a:
company or trust - you can generally claim a deduction for any salary and wages paid to yourself or other employees
partnership or sole trader - you can only claim the salary or wages you pay an employee, not what you pay to yourself.
Deductions for super contributions
Super contributions can be claimed as a deduction too, providing they were paid to a complying super fund or retirement saving account for your employees. To get this right, you’ll need to know the amount your employees earn for their ordinary hour of work called 'ordinary time earnings'.
Ordinary time earnings include commissions, shift loadings and allowances, but not overtime payments.
By getting your records ready early, making payments on time and reporting accurately will mean this year will be done and dusted in no time.
Deductions for small businesses
You can claim a deduction for most costs you incur in running your business, for example staff wages, marketing, and business finance costs.
Remember – you can't claim private expenses and it's extremely important that you keep records to support your claims.
What business travel expenses can I claim?
If you or your employees travel for business, you can claim:
airfares, train, bus or taxi fares
accommodation costs and meal expenses for overnight business travel – fringe benefits tax may apply for some employee travel expenses.
Can I deduct the cost of some assets straight away?
If you use the simplified depreciation rules, you claim a deduction:
immediately – for the business portion of depreciating assets costing less than $20,000 each
over time – for most other assets, combining costs into a small business pool and claiming a set percentage each year
immediately – if the balance of your pool is less than $20,000 at the end of the income year.
What can I claim if I have a home-based business?
If you run your business at your home, or your business is based from home, you can claim the business portion of some expenses, including mortgage interest and electricity.
If you sell your home, you may have to pay capital gains tax (CGT) on the business portion and declare it in your tax return.
Giving yourself time to assess your situation and pursue the most tax effective strategies is vital to a healthy business. The earlier you start planning, the more tax-saving options you have.
Get in touch with the tax team at Verve Group!
If you want to discuss your end-of-financial-year tax planning in plenty of time ahead of the 30 June deadline, contact the tax team at Verve Group on (08) 8120 4877 or email contact@vervegroup.com.au