With the end of the financial year fast approaching, local tax accountants say it’s time to prepare for key tax and compliance updates that could impact your business.
Armidale’s Forsyths Principal of Business Services Matt Schaefer said from superannuation changes to GST reporting shifts, being proactive will help you stay compliant and avoid unnecessary costs.
“As we approach tax time, it’s natural to focus on deductions, but it’s just as important to keep perspective,” Mr Schaefer said.
“Don’t fall into the trap of spending a dollar just to save 25 cents at the corporate tax rate.
“Any end-of-year spending should make sense in its own right, boosting business efficiency, lifting productivity, or contributing to long-term goals.”
And, Mr Schaefer said taking time means you can properly consider your tax deductions.
Leading accountancy body Certified Practising Accountants Australia has supported the advice of local tax experts and added there is also good news in that some work-related expenses, such as temporary work living costs, may be deductible for taxpayers.
CPA Australia Tax Lead Jenny Wong said rental property owners should take their time to ensure any deductions are accurate and consider they may be eligible to claim expenses including gardening and lawn mowing, bank fees and bookkeeping fees.
“Letting agent fees, including marketing are also deductible as well as end of lease cleaning costs,” Ms Wong said.
“Those who own an investment property in another city and use it for work may have deductions against the rental income and in some cases, claims are also valid if it’s a place you live in yourself.”
The Australian Taxation Office guidelines indicate that if an employer requires you to work away from home temporarily, and you decide to rent or buy an apartment in the other work location instead of relying on hotels or motels, you can claim deductions for the work-related costs related to the apartment.
Ms Wong said some other areas taxpayers such as professional performers (including actors, musicians and dancers), may not have thought about are claims for the cost of lessons and musical instruments or even costumes.
The ATO rules say some taxpayers are eligible to make claims for attending social functions.
For example, if a journalist attends an event they report on through their media organisation, a deduction can be claimed.
Every year many people donate to charities and donations over $2 are tax deductible.
“If you made one or more small cash donations, each of $2 or more, to bucket collections to a Deductible Gift Recipient (DGR), for example, to collections by a DGR for natural disaster victims – you can claim a total tax deduction of up to $10 for those donations for the income year without a receipt,” Ms Wong said.
ATO rules also allow taxpayers to seek deductions for subscriptions to trade or professional magazines or, if you’re an investor, subscriptions to financial publications and other research services.
One of the more unusual deductions relates to dogs!
CPA Australia said while you obviously can’t claim for your pet at home, if your business has a guard dog to maintain premises security, the dog is indeed deductible. The dog must be suitable for its purpose, so a chihuahua is unlikely to meet the criteria.
“The same applies for dogs on farms,” Ms Wong said.
“For the deduction to be successful with the ATO, the taxpayer must be able to explain how the dog serves a productive function within the business; a working farm dog generating income through livestock cultivation and sales is a legitimate tax deduction.”
For more information on what you can claim, talk to your accountant, or check the ATO website
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