The end of the tax year is almost upon us, and that means filing of taxes is due. It’s not all doom and gloom however, as there are certain things you can use within your business to lower the amount of tax you need to pay. These are known as ‘write offs’, or tax deductions, and knowing what you can and can’t write off is vital at this time of year.
Of course, you can’t just write off anything, and with the Government checking everything with a fine tooth comb, you need to be sure that you’re claiming for the right things only. To help you figure it out, here is a quick guide to the things you should be able to use as a tax deduction.
● Legal And Accounting Fees - If you outsourced any of your legal or accounting tasks, provided it was related to your business, these can be used as an expense
● Advertising costs - If you used anything like brochures, business cards, catalogues, etc, which was used directly to market your goods and services
● Transportation - Provided your car costs were related to your business, or public transport costs related to your business
● Uncollected debts - Also known as ‘bad debts’
● Banking charges - Service fees on your business account
● Business licences and taxes - Fees which are due to maintaining or obtaining the above
● Technological service provider costs - Any fees which are directly used for subscriptions to Cloud storage or digital services (ISP)
● Conference and seminar fees - If you attended any conferences or seminars to network and develop your business
● Expert business advice - E.g. consultants
● Interest on any money you borrowed to run your daily business
● Insurance on buildings, equipment, or machinery for your business
● Entertainment and meals - If you have to take out a client for business, there might be some lee-way here to use as an expense
● Office renting fees
● Supplies - Software, stationery, these are all things you can use as an expense
● Postage cost for mailing marketing content to your customers and clients
● Taxes on property, as well as any property maintenance costs
● Employee salaries
● Telephone costs
● Utility bills for your business property
These are the main things you can use as tax deductions. Of course, there are a few others which have grey areas attached to them, and you should research very carefully before you try and ‘write off’ any other item not on this list.
Overall however, understanding what adds up to a business expense and what doesn’t, can help save you a large amount on your outstanding tax balance at the end of the year.
Remember, you will need to show evidence of anything you ‘write off’, so if you are claiming for entertainment expenses upon taking a client out for a working lunch, you’ll need to have receipts and proof that this was indeed a business event. You should also maintain receipts, either electronic or paper-based, of anything else on this list. You will be asked to prove, it and the easier you can get your hands on the papers, the better.
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- Written by: Jag Bath