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Knowing what to claim for your business is very important as it not only helps you with your cash flow, it also saves you from being audited by the ATO. In fact, it’s not that easy to know exactly what you can claim as the tax deduction for small business can change every year. Here are the common tax deductions for your small business.
If you buy a machine, a vehicle or equipment costs less than $20,000 per item, you could claim for an immediate deduction. Time is running out as this $20,000 immediate asset deduction is only valid until 30 June 2017.
Small business owner can claim deduction for prepaid expenses. For example, you can claim deduction for next year insurance policy if you prepay it before 30 June. You also can prepay electricity, rent, bill or subscription fees before 30 June to claim tax deduction for this year.
Small business owner can prepay their business-related loan interest for 12 months and claim the interest paid for this year if you pay it before 30 June.
Contributing money into your Superfund and claim it as tax deduction for this year.
Prepaid your professional fees, and charges for 12 months, costs of setting up a new business can also be claimed as tax deduction for this financial year.
Go through your outstanding invoices, and identify any invoice that you are unlikely to be able to get paid. Do you know that bad debts can also be tax deduction?
A lot of your business-related expenses are tax deductible. You can find out more by speaking to a qualified accountant or visit the ATO website www.ato.com.au