5 Tax Tips For Small Businesses

Every business has to pay taxes to the government. While this does take away a good chunk of your profits, it is something that is unavoidable. However, there are ways to save on the taxes you pay the government. A good accounting firm that does taxation in Brisbane should be able to guide you properly in this regard. Below, we look at a few tips to save business taxes.

Mind The Deductions

Many business owners fail to claim the appropriate deductions like rent, utilities, legal expenses, and so on.  Ideally, you should also try to bring expenses to be pre-July 1 like prepaid rent and so on. But do keep in mind that you cannot simply claim a deduction on all kinds of expenses without proper justification. In fact, the tax authorities are pretty strict on the issue. The expenses have to be related to the income you generate from the business.

$20K Instant Write Off

Small businesses can claim a deduction of up to $20,000 on their asset purchases. For instance, if you buy machinery worth $50,000, you can deduct $20,000 from the taxes you owe to the government that year. This is particularly useful for new businesses who may be struggling to generate sufficient revenues during the initial year. The validity of the scheme is usually decided on a yearly basis by the Senate. Since the lawmakers typically see it as a nice incentive for businesses, they always decide to keep it active. Keep in mind never to over-extend your business just so you could pursue tax benefits as this could shave off a good chunk of operating cash saved in the bank.

Income Tax Offset

For unincorporated businesses, the government allows for small business income tax offset. This lets business owners save $1,000 on their tax bill provided the revenues are below $5 million. The benefit is applicable to sole traders. The offsets provide an excellent way for micro business owners to save money during early stages of their growth. Any service offering taxation in Brisbane can help you with the offset.

Super Payments

If business owners wish to claim tax deduction on the super payments they make to the workers, it is very important to ensure that the payments are made prior to June 30 of the year. Else, your opportunity to claim deduction will be lost. Unfortunately, many business owners are not aware of the rule and wonder why they haven’t received the deductions. You need to pay the supers to your employees 28 days after every quarter end. If you miss the deadline in any quarter, the super payments will not be tax deductible. Keep these rules in mind the next time you pay the supers.

Well-Maintained Records

Always ensure that you maintain accounts the right way. When the tax guy comes to check your books, well-maintained accounts will present fewer headaches to deal with. Properly marinated accounts also ensure that you are able to easily claim deductions and do not miss out on any of them.