Introduction
As the financial year comes to a close, small businesses in Western Sydney must take full advantage of available tax deductions to minimise their tax liabilities. Understanding and claiming these deductions can significantly impact your bottom line. This guide provides a comprehensive overview of common and often overlooked tax deductions for 2024.
Common Tax Deductions
- Operating Expenses
- Deduct regular business expenses such as rent, utilities, office supplies, and insurance premiums. Ensure all expenses are well-documented with receipts and invoices.
- Vehicle and Travel Expenses
- Claim deductions for business-related vehicle expenses, including fuel, maintenance, and depreciation. Additionally, travel expenses such as accommodation, meals, and transport for business trips can be deducted.
- Home Office Expenses
- If you run your business from home, you can claim a portion of home office expenses, including electricity, internet, and phone bills. Use the ATO’s home office expense calculator to ensure accuracy.
- Depreciation of Assets
- Deduct the depreciation of business assets like machinery, equipment, and furniture. Use the simplified depreciation rules for small businesses to claim immediate deductions for assets costing less than $20,000.
- Marketing and Advertising Costs
- Expenses related to marketing and advertising, including website development, social media campaigns, and print advertisements, are deductible.
Overlooked Tax Deductions
- Professional Development
- Claim deductions for expenses related to professional development, including courses, workshops, and industry conferences that enhance your skills and knowledge.
- Bad Debts
- Deduct bad debts that have been written off during the financial year. Ensure you have taken reasonable steps to recover the debt before writing it off.
- Charitable Donations
- Donations to registered charities are deductible. Keep receipts and ensure the donations are made to organisations with Deductible Gift Recipient (DGR) status.
- Interest and Banking Fees
- Deduct interest on business loans and overdrafts, as well as banking fees associated with your business accounts.
Documentation and Compliance
Accurate record-keeping is crucial for claiming tax deductions. Ensure all expenses are well-documented with receipts, invoices, and bank statements. Maintain organised records throughout the year to simplify the tax filing process.
Conclusion
Maximising tax deductions requires careful planning and diligent record-keeping. By understanding and claiming all eligible deductions, small businesses in Western Sydney can significantly reduce their tax liabilities and improve their financial health. For personalised advice and assistance with your tax planning, contact Carmody Accounting and Business Advisory today.
