We’re almost half way through the tax year! Are you maximising your income by being aware of your tax deductions?
Being aware throughout the tax year (not just in June as the tax year ends) can help you maximise your income and make wise spending decisions throughout the year.
When it comes to your ‘business expenses’, i.e. those expenses that are essential for you to do your job, the Australian Tax Office has three golden rules:
– The money must have been spent for work purposes (not a private expense).
– If it is for a mix of work and private use, only claim the portion that is related to your work.
– You must have records to prove it.
So these expenses are outside of your normal salary sacrificed items such as laptops tablets, watches and phones, so the reason why we are telling you this is because Business expenses and salary sacrificing are different things and work differently at the ATO end of the spectrum and we care about helping you make the most of your pay! At Bookssorted, we can also support you in salary sacrificing the expense where it is best to do so — see our recent blog on salary sacrifice for more information.
Some examples of business expenses that contractors in our community are claiming on tax include: stationery, parking (when driving between offices for meetings), laptop accessories, i.e. laptop bag, headphones, networking events, magazine subscriptions, ISP and more. Don;t forget you can also claim the GST on these items which you can’t do if you save them up for tax time.
In cases such as phone and internet, and car expenses, the work and personal components must be identified as a percentage. While this can sound like an admin burden, it’s worth taking the time to identify this so you can claim the work related portion of the expense and maximise your income — any deduction is better than none!
You can find out more about how to claim business expenses on the ATO website at https://www.ato.gov.au/business/income-and-deductions-for-business/deductions/.
So don’t wait until June 2019 to start looking at your 18–19 tax deductions, start now and maximise your income the best you can!