MYOB have published an article on their website providing details of 17 commonly overlooked ATO business tax deductions.
MYOB emphasises that small business owners can often “fall into old habits at tax time, without considering some of the less obvious or most recent ATO tax deductions available.” They also emphasised that businesses need to be smarter and sharper with their deductions every financial year.
The 17 commonly overlooked ATO business tax deductions according to MYOB are: prepay expenses, damaged or obsolete stock, new assets, union fees, donations, rental property expenses, home office expenses, income protection insurance, medical expenses, work-related car expenses, internet expenses, mobile phone expenses, self-education expenses, sun protection, laundry expenses, the cost of managing tax affairs, and financial loss and bad debts.
In regards to prepay expenses, these include but are not limited to: subscriptions, business travel expenses, training events, leases, rent, phone, internet, insurance and business asset repairs. However these expenses are not to exceed more than one year.
In regards to damaged or obsolete stock, MYOB recommends that small business owners take a good look at their stock, identify any damaged or obsolete stock and decided whether to write it down or write it off. MYOB states that doing this will impact the value of the trading stock and profit margins.
In regards to new assets, MYOB recommends that small business owners who need new assets to purchase them now as the 2017 Federal Budget gave small business owners and sole traders a $20,000 tax deduction. This only applies to small businesses and sole traders with an active ABN who have a turnover of less than $10 million.
In regards to union fees, if a small business owner or sole trader pays these each year they’re entitled to a deduction under other work related expenses. In regards to donations, if there are $2 or more to a charitable organisation, they are tax deductible provided that you have the receipt.
In regards to rental property expenses, MYOB states that these often go unclaimed. Tax deductible rental property expenses include but are not limited to: bank fees, garden and lawn mowing, pest control, security patrol fees, and inspections of property and maintenance.
In regards to home office expenses, small businesses owners and sole traders that work from home can claim the cost of using their personal computer, equipment, furniture, lighting, heating and even a percentage of rent/mortgage as a tax deduction.
In regards to income protection insurance, small business owners and sole traders who have this can claim the premiums against the loss of income. In regards to medical expenses, MYOB warn that the net medical expenses tax offset is being phased out.
In regards to work-related car expenses, small business owners and sole traders who use their personal car for work-related reasons, such as driving between offices or moving from one job site to another, can usually claim fuel and maintenance costs as deductions. In regards to internet expenses, those who work from home and have their internet connection in their name could claim some of their internet expenses as a deduction. In regards to mobile phone expenses, work-related calls could be claimed.
In regards to self-education expenses, expenses such as textbooks, stationery, amenities fees and travel expenses, can be claimed if there’s a connection between the course and your role in the business. In regards to sun protection, MYOB says that small business owners and sole traders are entitled to a tax deduction if part of their employment requires them to work outside for long periods of time.
In regards to laundry expenses, the cost for washing uniforms can be claimed. In regards to the cost of managing tax affairs, the costs of using a tax agent to prepare a tax return are always tax deductible. In regards to financial loss and bad debts, MYOB recommends that small business owners and sole traders speak with their financial advisor to minimise the impact of loss and debts.
MYOB’s article can be read in full here.
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