Tax time can either reap rewards or bring penalties for small businesses. Here are five little-known tips to put out your best foot forward and maximise the deductions you can claim.
1. Offset your income tax
If the revenue of your business is under AU $5 million, you may be able to get up to $1,000 off your tax bill if your company is unincorporated. An unincorporated business is privately owned, and doesn't have a separate legal identity from its owners, meaning they're are fully liable for legal action. For businesses that meet these requirements, the current offset percentage is 8 per cent, up to the $1,000 limit, however is expected to be around 16 per cent in 2027.
2. Keep up with superannuation
When it comes to superannuation deductions, it pays to be prompt with giving your employees their contributions. Employers wanting to claim deductions for superannuation need to ensure payments are made before June 30 each financial year, otherwise they forfeit the return for that period. Any superannuation owed to employees must be paid within 28 days of a quarter ending, otherwise it isn't eligible for deductions.
3. Claim costs for renting
If you're a small business that leases a property to operate out of, you may be able to claim certain deductions. This depends on what fees you or your landlord pay to maintain the property. Expenses you could claim include:
- Water charges.
- Cleaning and garden maintenance.
- Pest control.
- Council rates.
These operational expenses are capped at $1,000.
4. Consider your personal services income
Those who are self-employed, and earn income for skills or expertise may be able to claim special deductions under personal services income. Personal services income is a payment for special skills, and can be sought in a range of industries.
5. Record your finances
The best way to ace the tax filing process is by having all of your expenses – both work-related and personal – on hand well before return time. This means that your trusted accountant has plenty of time to trawl though your records, identifying what expenses are eligible for deductions and correcting any arrears before penalties are given.
At WMC Accounting, we understand the highs and lows of tax time, and are dedicated to helping our small business clients maximise their return through specialist tax planning. For more information on our services, get in touch with our team.