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Tax Deductions for Sole Traders & Small Businesses like You

Posted on 02 September 2019

The tax season is halfway through and if you haven’t processed your taxes yet—better hurry! To help you along, here are some claims that you can make (as a sole trader or small business owner).

Your Tax Deductions and Claims

Whether you’re running a small business or working as a sole trader, you can claim for some tax deductions, including, but not limited to:

  • Business travel expenses and vehicle expenses (fuel, maintenance, lease payments, etc.)
  • Maintenance costs of machinery, tools, or premises
  • Personal superannuation contributions for yourself and any employees you take on
  • Depreciation of things, equipment and the like
  • Bad debts or invoices that aren’t going to be paid
  • Pre-paid expenses on items or services to be delivered in the following tax year
  • Other expenses including stationery, advertising, banking, accounting and tax management, work uniforms, relevant courses, and subscriptions

Make sure to keep all your business records for the fiscal year (ATO requires the last five years’ worth). Include your purchase and expense receipts, sales records and invoices, project contracts and payments, bank statements, and payments to employees or contractors. Make sure that your accounts receivable, accounts payable, and current inventory are documented, too.

Additionally, Small Businesses may claim for the following deductions:

  • Tax Breaks

    One of the best tax breaks for small businesses is the instant asset write-off (applies to qualifying purchases made after 2 April 2019). These include:

    • POS devices like cash registers
    • Fittings, fixtures, telephones, and security systems
    • Computers, laptops and tablets
    • Cars and utility vehicles (vans, trucks, etc.)
  • Insurance and fringe benefits contributions, including workers’ compensation insurance premiums, insurance for fire, business-use cars, public liability, theft and loss of profits, etc.

Sole Traders may also claim for the following deductions:

  • Home office expenses including occupancy (mortgage interest, insurance, council rates) and running (electricity, phone, cleaning) expenses
  • Personal Services Income (PSI) - If you’re paid primarily for your personal efforts, skills, or expertise (more than 50% of the work or project), your income from that project or contract would be called personal services income (PSI). This changes how you may be filing your tax returns and lodging for claims. To help you find out, click this link.

Ready to file your returns and lodge your claims? If you would like to know more tax deductions for your business (small or sole), click this link—we may be able to help.

Claim Your Tax Back Now!

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