Questions from small business taxpayers have made up a significant proportion of the enquiries the ATO fields in its day-to-day business. The ATO has had the opportunity to identify and share some of the top three tax deduction questions that applied to small business taxpayers.
Aside from specific deductions, the ATO also reminds small businesses that they can claim a deduction for most costs incurred in running the business, and this includes, for example, staff wages, marketing, and business finance costs. “Remember – you can’t claim private expenses,” the ATO says, “and make sure you keep records to support your claims.” The top three deduction questions, and the ATO’s answers, are: What business travel expenses can I claim? "If you or your employees travel for business, you can claim:
“If you use the simplified depreciation rules, you claim a deduction:
“If you run your business at your home, or your business is based from home, you can claim the business portion of some expenses, including mortgage interest and electricity" “If you sell your home, you may have to pay capital gains tax (CGT) on the business portion and declare it in your tax return.” Tax practitioners with small business clients may want to refresh their knowledge covering these particular areas of taxation. The following links to the ATO website may help:
Source: Tax & Super Australia
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ATO are receiving a large number of tax returns with an incorrect residency status for working holiday makers.
ATO encourage taxpayers understand whether they are a resident for tax purposes, and check they have completed their status correctly before lodging their tax returns. Let them know that most working holiday makers on a 417 or 462 visa are not Australian residents due to their pattern of working and holidaying while in Australia. Advise them that the tax rates for working holiday makers on a 417 or 462 visa changed and two different rates apply for their 2017 tax returns. Taxpayers must pay:
ATO will review residency when processing taxpayers' tax returns. If it is inconsistent with other information we hold, ATO will adjust the residency status before issuing their notice of assessment. Source: Are you an Australian residency for tax purposes Working holiday makers You can claim vehicle and other travel expenses directly connected with your work, but generally you can't claim for normal trips between home and work as this is considered private travel.
Trips between home and work are generally considered private travel. However, you can claim deductions in some circumstances, as well as for some travel between two workplaces. If your travel was partly private and partly for work, you can only claim for the part related to your work. What you can claim:
You can't claim the cost of driving your car between work and home just because:
If you do itinerant work (or have shifting places of work) you can claim the cost for driving between workplaces and your home. The following factors may indicate you do itinerant work:
Source: Travel between home and work and between workplaces |
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