Taxes can be quite a challenging task and is one of the reasons why most people would rather avoid them, but for someone who plans and pays on time, it can make several tax benefits. Calculation of taxable income is quite simple as–
Taxable Income = Assessable Income – Tax Deductions
Let’s understand what items can be categorised under assessable income or expenses on which tax deductions can be claimed. Calculating assessable income is a vital part of your small business accounting which helps in further tax calculations.
As for Tax deduction, we have explained earlier in one of our blogs about “Things you might be doing wrong which may land you in trouble with ATO”,
If your expense is a mix of both personal and business use, you can claim the portion used for your business. As for types of expenses, operating expenses can be claimed in the same year as you incur them, and capital expenses can be claimed over an extended period.
Now let us discuss in details some potential tax deductions to keep in mind while preparing your tax return-
Now that we know what can be deducted, it is essential to understand and note expenses that are not deductible, claiming for non-deductible expense might give rise to more significant issues. Here are some non-deductible expenses-
The tax calculation task is a complex one, so it is best to trust your accounting outsourcing provider or tax consultant as it will help in your accurate tax calculation. In this article, we have tried to provide extensive information on the tax deduction, but if you want to know more or if you are still confused, you can always contact us and talk to our experts who will guide you with a more detailed process.