There’s no doubt that running a small business is a daunting and expensive venture, but the pressure often falls heavier in overlooked areas. It’s easy to muster the determination to build your company from the ground-up, but it’s not all about raw talent as your success largely depends on complying with complicated taxation laws.
Paying for taxes, in particular, can be a minefield for the unwary start-ups and sole traders. If you don’t take the time to work with a professional accountant who can help navigate the field and available tax saving options, you may end up paying more than you should to the government every year.
With that in mind, we’re here to give a simple rundown on essential tax tips that can help reduce your taxable income in 2020:
Tip #1: Claim Work From Home Expenses
The recent pandemic has put plenty of businesses across the globe under temporary quarantine, introducing remote work to various industries. This makes it the ideal time to claim for work from home expenses as a tax deduction, which you can do by considering the following contributions to your work:
Internet and electricity;
Business phone costs;
The decline in value of office equipment and furnishings;
The depreciation of office additions like carpets and light fixtures;
Occupancy expenses like rent, mortgage, insurance, interest, and other rates that relate to a space that you use to progress your career;
Tip #2: Leverage The Instant Asset Write Off
Seeing as the COVID-19 outbreak has caused a sudden economic downturn, governments in different countries are releasing assets businesses can write off. Most extend this perk up until the 31st of December 2020, allowing your small business to deduct 100 per cent on taxes for any work-related purchases this year.
Tip #3: Look Into Your Super Contributions
Most businesses are required to fulfill $25,0000 of the concessional cap annually as part of their financial obligations, but the recent pandemic leaves more room for small businesses to build on their income.
If your income was compromised or it does not meet the standard concessional cap in the first place, you are given up to five years to contribute the full payment. Of course, this is reserved for businesses with a marginal tax rate higher than 15 per cent contributions tax.
The Bottom Line: Understanding A Simple Overview Of Your Tax Obligations In A Post-Coronavirus Economy
Handling taxes can be stressful for small business owners, especially if you are juggling plenty of responsibilities on your plate to keep the operations running smoothly during these tough times this 2020.
Reducing your tax liability is another problem that seems too complex to tackle on your own, but having an expert accountant by your side can easily help you discover tax-saving strategies.
With fewer payments given to your taxes, you have more to your budget that is working to improve your business.
If you’re looking for a reliable and affordable accountant in Australia, we’re your best option. We offer various services that can improve the profitability rate of your business venture, so get in touch with us today for a free consultation!