Tax time can be an incredibly complex and stressful time for any individual, and particularly more so for business owners. Even if you have someone looking after your accounts, preparing all the documentation, evidence and receipts required for lodgement is in most cases an arduous task to say the least, even for the most well-organised.
Whether you manage your returns yourself or leave it with your trusty accountant, there are a few strange and relatively-unknown items that may get left off the list. We know there’s still (thankfully!) a ways to go before this year’s tax time, but here are a few items to double check ahead of your next lodgement –
We hope you saved your receipts from last year’s spree, because it turns out you may be able to claim your staff Christmas gifts. MYOB reported last year that giving your staff certain items known as “non-entertainment” gifts, under $300 each, is fully tax deductible with no Fringe Benefit Tax payable. Gift types include skincare and beauty items, flowers, wine, perfume, vouchers and hampers. Sadly, client gifts are not covered, nor are staff Christmas parties.
When claiming uniform expenses, these can only be carried out on proper uniform attire, or clothing that has been embroidered with your company logo, never for conventional clothing that could otherwise be worn to a non-work-related occasion. Also if you’re doing your own laundering of these items, you should be able to claim $1 per load of washing, drying and ironing, given you’ve kept receipts.
We can guarantee that you’re using your mobile to conduct business, so you should be claiming a portion of your bill. This is particularly true if you’re a social media addict on your business page! How much of your time do you spend posting, or conducting research? Be aware that the ATO announced a crackdown as recently as late last year, and that you should never be claiming the full amount. It should be percentage-based – ie, if you use your mobile for work equal to the amount you use it for personal use, you should claim 50% of your bill each financial year. You will also be able to claim home office items, laptops and their annual depreciation, etc if you carry out work at home. In fact, you can even claim depreciation on home office furniture given it’s used for work 100% of the time.
We know that these are often big ticket items, so it’s handy to know that your beloved spa or clinic coffee machine also makes it to the deductions list – given it’s used as a staff amenity.
There was a fair amount of news hype towards the end of last year on the subject of handbags being tax deductable. To set the record straight – yes, your trusty tote can be listed as a deduction, however, you must be able to prove that is it used for carrying work laptop/s documents in the same way a satchel would be. This can be a tricky one, and evidence like a log book of its use may even be required. The ATO will not accept unreasonable claims either, so we don’t recommend trying to get your Chanel or YSL over the line, business use or not!
Do keep in mind, as with any return, individual circumstances will vary from business to business, and deductions should be cleared with your agent or the ATO before submitting. Happy lodging!
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