![]() You can claim a tax deduction for expenses that relate to repairs, maintenance or replacement of machinery, tools, or your business premises, as long as the expenses are not capital expenses.Ī capital expense is money spent to purchase assets like plant and equipment. Repairs, maintenance, and replacement expenses Salary and wage expenses are a type of operating expense (sometimes called working or revenue expense).the super contributions you make to a complying super fund or retirement savings account (RSA) for your employees and for certain contractors.the salaries and wages you pay to your employees.Deductible Expenses Staff salaries and super contributionsĪs a business owner, you can generally claim tax deductions for: NB: You cannot claim the GST component of the purchase price as an expense if you are able to claim it as a GST credit on your business activity statement. ![]() However, if you only use the computer 50% of the time for your business and 50% of the time for private use, you are only able to claim 50% of the amount as an expense. You must have records to prove the expense is valid.įor example, if you buy a computer and you only use it for your business, you can claim 100% of the full purchase price as a business expense.If the expense you are claiming is for a mix of business and private use, you can only claim the portion that is used for your business.The expense must relate wholly to your business and not to any private use.To be able to claim a business expense the following applies: capital expenses (such as machinery, buildings, and equipment) over a longer period.operating expenses (such as office stationery, rent for premises, purchase of stock and staff wages) in the year you incur them.The type of expense you are claiming – operating expense or capital expense – will determine when you can claim your deduction. Company – you claim the deductions in your company tax return.Trust – you claim the deductions in your trust tax return.Partnership – you can claim the deductions in your partnership tax return.Sole trader – you claim the deductions in your individual tax return.How you claim your business expenses will depend on the type of business structure you have. kept for five years (although some records need to be kept longer).in English, or in a form that we can readily access and convert into English.in writing, either on paper or electronically.Under tax law, your records must clearly explain all transactions and be: If you claim business tax deductions, which will reduce the tax you will be required to pay, you need to keep accurate records to verify what you are claiming. The majority of the income you receive from running your business is ‘assessable income’ – income that is subject to tax.Assessable income – tax deductions = taxable income.The Australian Tax Office (ATO) calculates your taxable income using this formula: Your tax professional will be able to provide all the relevant information you will need. When you submit your tax return you can claim a tax deduction for most expenses that are incurred from running your business, but only as long as they are directly related to the business’s income. It is worth familiarising yourself with the different types of business structures too. A company is more expensive to set up therefore your company tax deductible expenses will generally be higher than those of a small business. This will ensure that from day one you are aware of all your liabilities as well as any expenses you will be able to claim. ![]() Before setting up a business or company of any size you should consult with a tax professional.
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