Many small businesses in Queensland are home-based businesses, which have very specific taxation needs. Like all businesses, there are many important tax considerations when setting up a home-based business. Here are some tips when planning your tax needs this financial year:
General Tax Time Tips
- Avoid penalties by lodging and paying your tax on time
- Consult with an ITP tax specialist about what’s best for your small business
- Keep your GST owed in a separate account, so there are no surprises when paying GST back at tax time
- Keep electronic copies of all your documentation so it’s easy to find at the end of financial year
Motor Vehicle Expenses
As a home-business owner, you can usually claim to deduct any travel costs attributed to business related travel, such as client meetings or trips to a taxation adviser. You may be entitled to claim vehicle expenses as long as it is related to your business income. Like anyone who travels for work, it is vital to keep a log book to track the trips that are made for business purposes. You can then claim an accurate percentage of total travel expenses and vehicle costs incurred through running your home based business.
There are costs associated with running a home business that can be deducted in your tax lodgement. Expenses may range from the cost of the business space itself, the electricity and phone bills to run the office space or cleaning and equipment costs. Keep in mind that general house expenses cannot be claimed, only those directly associated with running the business space.
Get the most out of your home-based business by ensuring you are keeping records, receipts and logs for all expenses incurred throughout the financial year. Keep receipts for even the small expenses, as they’ll add up and help in deducting more from your total income, therefore reducing your tax obligation.
If you need help on your small business tax this financial year, contact ITP Qld for advice today on 1300 555 773.