top of page

How to Reduce Your Taxes with Ecommerce Accounting Services

As an entrepreneur, the end of the financial year can be stressful. You have to ensure you're giving the Australian Taxation Office (ATO) the right amount of money, which means going through your records to see what can be claimed as a deduction. Many people end up paying more tax than they need to because they don't know the strategies to minimise their tax bills. Here are legal ways you can do that through ecommerce accounting services:


Asset Write-Offs


The simplified depreciation rules allow you to claim deductions for certain business assets that cost less than a certain amount. These deductions apply to more than one asset if each cost is lower than the relevant threshold. The rules also apply to second-hand assets. However, some assets are excluded from the simplified depreciation rules.


The ATO has announced that businesses with an aggregated turnover between $50 million and $500 million can immediately write off assets worth up to $150,000. This change applies to assets purchased before 31 December 2021 and installed for use by 30 June 2022.


This means that if you buy an asset for your business, you can deduct the cost of that asset from your taxes in the same year you bought and installed it. Declare these to your ecommerce accounting services so they can make the deductions for you.


Base Rate Reduction


Base rate entities make less than $50 million a year. If these entities have passive income that makes up 80 percent or less of their total assessable income, they are liable for a company tax rate of 27.5 percent. Passive income includes royalties, rent, net capital gains, and other similar types of income.


The company tax rate for eligible businesses in Melbourne has been reduced to 25 percent for 2021–22. This will help reduce the tax burden for these businesses.


Deductible Super Contributions


The concessional superannuation cap is the maximum amount of money that can be contributed to a superannuation fund before extra taxes are incurred. The cap is $27,500 for all ages from 1 July 2021. Any contributions to a superannuation fund above this amount will be taxed at a higher rate. The concessional superannuation cap includes the super guarantee contributions made by the business owner.


Your ecommerce accounting services firm needs the contributions to be made before 30 June so they can claim tax deductions for the business. The ATO will penalise the business if the contributions are not made on time. Therefore, you must keep track of the limit and claim a deduction for the contribution on your taxes.


Base Rate Reduction


Base rate entities make less than $50 million a year. If these entities have passive income that makes up 80 percent or less of their total assessable income, they are liable for a company tax rate of 27.5 percent. Passive income includes royalties, rent, net capital gains, and other similar types of income.


The company tax rate for eligible businesses in Melbourne has been reduced to 25 percent for 2021–22. This will help reduce the tax burden for these businesses.


Legally Reduce Taxes with The ECommerce Accountant


We’re ecommerce accounting services that know the right ways to minimise the taxes you owe so you can add more to your business and continue scaling! Reach out to us through our website today!


5 views0 comments

Comments


bottom of page