Business owners should always remember that all income-generating purchases are eligible for tax deduction. Here is a list of the most common deductions businesses tend to disregard and how to claim them.
Accounting and banking expenses
Business account-related bank fees and charges, business loan or overdraft interests, and even franchise fees that are not part of any initial purchase can be eligible for tax deductions.
Most expenses can be claimed as deductions to reduce assessable income, but these exceptions can lead to a bigger refund.
If a business owner opts for prepaid schemes on business-related expenses, these could trigger tax deductions which might have been initially overlooked.
Inventory and stock
Business owners must always consider valuing their stock trading every fiscal year. Operate on maximising eligibility for tax breaks when opening stock exceeds closing stock. Doing revaluing may will impact the value of the trading stock and profit margins.
Canine best friend
If business owners have a dog safeguarding the business, owners can claim for pet food and veterinarian bills.
Of course, you need to establish that your dog, especially considering its breed, is up to the task. A German shepherd would more likely be an indisputable guardian of your small business location than, say, a poodle. Working dogs on farms are also eligible for a deduction.
Bags used to carry work laptops of business owners can actually be claimed as a tax deduction. It must be established that the bag is used for work-related purposes. Moreover, bear in mind that the bag’s cost and the business’s revenue should be reasonably proportioned.
Even if it’s not within the business owner’s nominated profession, any kind of education and training can be tax-deductible. Florists can take painting classes to improve their aesthetic appreciation, bringing the learnings from these trainings on improving their floral designing skills and their craft.
The cost can be claimed as deductions as long as it can be established that the training is beneficial to the business owner.
Petrol costs are actually tax-deductible. The same logic applies to highway tolls, train and bus tickets, Uber rides, and even airline expenses. All it takes to claim these as deductions is to establish that these were used for the sake of running the business.
Keep in mind that business owners must speak with their accountants for the sake of clarification. Never underestimate these seemingly small and insignificant tax deductions as they might just add up to a surprisingly big refund— undoubtedly a great news for you and your business!
By the way, even your accountant’s fees are tax-deductible—so consult with them now!