Are you overlooking these 5 Australian tax deductions? It could be costing your business.

Are you overlooking these 5 Australian tax deductions? It could be costing your business.

Tax can be somewhat overwhelming and sometimes seem like a mountain to climb. Business owners usually get into a routine during tax time and just continue to claim what they have always done so in the past without considering some less known opportunities for deductions.

Taxation law is always changing and never has this been so evident as the recent situation with Covid-19 has proven. Given that we are now in the last quarter and in the home stretch of the 2020 financial year, now is a great time to make sure that you don’t overlook these 5 Australian tax deductions that could be costing your business.

Don’t be one of the business owners that miss out on tax savings by overpaying your fair share of tax. Tax expense is often one of the more significant expenses on your profit and statement, so it would be wise to know that you have exhausted all the opportunities to reduce the expense as much as possible. One way to do this is to make sure that you claim everything that you’re entitled to and itemise deductions properly.

In this blog, we’re making it easier for you to get organised for end of year, with five deductions that can help Australian business owners save the most at the end of the financial year.

*Prepay some expenses in this financial year to claim a deduction.*

1. Prepay expenses

With tax deductions, every dollar adds up. Prepaying your expenses before 30 June 2020 means that you can claim a deduction in this financial year.

For example, you can prepay expenses such as subscriptions, training or webinar events, leases, phone, internet, insurance etc.

2. Superannuation contributions

*Build your retirement nest egg with contributions to your superfund.*

Small business owners think of super as something that you pay for yourself and your employees. From a tax law point of view, it is important to know that you are only entitled to the deduction when you pay the super and it is received by the superfund.

So, make sure that all super payments are received by the employees’ superfund by 30 June 2019 in order to qualify for a tax deduction in this financial year.

3. Google and Facebook Ads.

These days, most businesses use Google and Facebook Ads to do some online marketing and help get customers to their website.

Even though these expenses may seem small per transaction, if your business does regular marketing, they can add up to a substantial claim. Make sure you are tracking your advertising spend so that you can claim it as a tax deduction.

4. New purchases of equipment or motor vehicles.

If you have had a great year, you could consider purchasing new equipment or motor vehicle for your business.

*Now might be a great time to buy a new motor vehicle for your business.*

The instant-asset write off has now increased to $150,000 for the 2020 financial year so it is a great opportunity to purchase bigger ticket business items and claim a deduction in full.

5. Bad debt

Review your debtors balance before the end of the financial year and write off any receivable balances that you know you will not be able to recover. These debts can reduce your tax bill.

As accountants, we are here to help you understand the rules and help you save money by maximising your deductions.

*Make sure to regularly review your debtors and write off any non-recoverable.*

Call us to discuss any potential deductions that you are unsure of. It is likely that we would be able to identify additional ones that you haven’t considered before.

Are you overlooking these 5 Australian tax deductions? It could be costing your business.