As a business owner, you have the opportunity to claim tax deductions for most expenses incurred in the course of your business that are directly related to generating your assessable income. To ensure a successful deduction claim, it’s crucial to remember three golden rules.
- Business Expenses: The expenses must have been spent solely for your business purposes and not for personal use. There must be a link to work and that link need to legitimate. If you claim and it is not legitimate it can lead to large fines
- Proportional Deductions: If an expense is used for both business and personal purposes, you can only claim the portion that is directly related to your business activities.
- Documentation: It is essential to maintain records that can substantiate your deductions. Proper documentation, such as receipts and invoices, is crucial to support your claim.
If you’re an employee seeking deductions, similar golden rules apply to ensure a valid claim.
- Personal Expenditure: You must have personally incurred the expenses and not been reimbursed by your employer.
- Direct Relevance: The expenses must directly relate to earning your income as an employee.
- Records: As with business owners, employees need to maintain records to substantiate their deductions. Keeping receipts and other relevant documents serves as evidence for your claim.
At Jayton Joseph Accountnat, we understand the intricacies of deductions and can guide you through the process to maximize your entitlements. Contact us today to discuss your tax situation and how we can assist you in optimizing your deductions.
Remember, accurate record-keeping and understanding the specific rules for your circumstances are key to claiming deductions successfully. Let us take care of the complexities while you focus on what matters most—your business or your profession.
