As a business owner, you have to deal with number of transactions. And as a responsible citizen, you need to pay a certain amount of your income as tax to the government. However, you can also file for tax return which is your business right. As a business dealer, you will be happy to get the most of the business income tax return, right? Well, you can get that, but what you need is to know the proper methods of taking maximum advantages of potential deductions in an organized fashion. Even if you’re not a tax professional, you can easily get prepared yourself using simpler software applications available now and following basic deduction rules. Here given are some important tips to maximize your tax return that will reduce enough stress and make your financial life better.
You have to Determine your Tax
You should first work out your tax bracket accurately. Do background research, consult with any experienced tax agent to know and understand what your tax obligations are. Keep in mind that, tax brackets change every year. You should be aware of the individual and married income tax rates that are set by Australian Taxation Office or ATO. This will give you the understanding of your position. If you know your tax bracket, you can easily get to know about your deductions, too.
You have to Create a Receipt System
Receipts are the evidences of every transaction you make in a business, which include sales, purchases, payments as well as payments of debts. At the same time, they are very vulnerable to get lost. So, it is extremely important to keep your receipts safe and secured. That doesn’t mean that you will just stuff them into some hidden chest or a giant folder or envelope. Another problem with them is that, with time, the ink gets faded that leads to just a blank sheet of paper.
To avoid this problem, it is always recommended to create a receipt system. Just do a simple thing. Track and save all the receipts during the entire tax period. These receipts will help you to identify the number of credits you may claim, which might be unknown to you. You should file all the important receipts and consult with your appointed accountant to get the information on what exactly can you claim. The good news is that, now there are digital software solutions are available which can digitize your receipts.
You can Make a Charitable Payments
Does your business do charities? Well, it is not only a noble job, but will also pay off you well during the tax period. As a wise business person, you should make charity payments if you really want to make substantial deduction from your taxable income. For that, you can set up a monthly donation to a charity which you prefer the most. It will not only give back your money but will also let you feel quite great because helping someone is always great, isn’t it?
You Should Review your Deductions to maximize your Tax Return
This is one of the most important things to do to claim most of your taxes. But, it’s also the most sensitive point, in which most of the Australians fumble. First, you should know what costs you can claim as tax deductions are. You can claim expenses spent in business travel like transport or airfare, accommodation and food cost in case of overnight stay. If you attend training or organize trainings, you can claim those costs too. ATO interest, work-related supply costs as well as educational course fees can also get covered. For more information, you can search on the official website of ATO or ask a tax agent Perth.
Home and Car Expenses
Do you drive your own car to go to work? Then, you must always keep an updated calculation of car expenses like fuel costs, parking charges. Even if you have home office, then also you may have to drive to other places for business purposes. You can claim these additional expenses for using cars as these are exclusively for business purposes.
To claim these costs, first make strategy to calculate the total car allowance. You can simply use a mileage tracker application which will calculate the amount of costs and the total distance your car covered throughout the financial year. Home or office expenses include equipment, furniture, cleaning, electricity etc. What you always need to do is to keep track of the receipts.
If you go on a business trip, you will get deductions in forms of airfares, transport costs as well as accommodation and meal costs in case of an overnight stay. If your employer goes on a business trip, you can pay that person’s travel costs direct from your business account or give a reimbursement, as per your business standards.
You Can get Paid to Read News and Magazines
Sound interesting, isn’t it? But this actually happens. Do you have the habit of reading business journals or industry magazines? Then, you can get deductions on the amount of subscription fees. Because these magazines will help you to stay updated that will improve your business, ATO encourages reading. You should show a direct connection between the subscription fees and your assessable income to claim the deduction. The claim is regardless of the mode of publishing the magazine. And, if the amount of subscription is less than Three Hundred US Dollars, you will get an immediate deduction.
You Can put your Money in a Superannuation Fund
Maintaining a superannuation fund, and that too self-managed, is a finest way to make most of the tax return. If your income is less than a certain amount in a year, for each American Dollar you will earn 50 cents from the government. You can check the amount on the website of ATO. This will also benefit after your retirement.
In the End
To know more about income tax or individual tax return, you may search on different portals of the government. If you’re not so used to internet search, best way is to discuss with any registered tax agent.
Do you like the above tips for Maximize your Tax Return? Share us.