Before you file your individual tax return in Australia, here are some things that you should know. If you are a self-employed professional, then you can take advantage of tax breaks that are provided by the government. Self-employment can be risky but it is a very rewarding venture. The biggest benefits are the tax breaks that you can enjoy now.
It is a good idea to get in touch with a tax return accountant or the best tax consultant Perth has to offer. Professional help can make a very big difference in a situation like this. For a very small investment, you will be able to save thousands of dollars annually. This money can be used for many other purposes.
Here are the 9 tax deductions that you can claim on your income tax annually if you’re a self-employed professional.
1. Travel and Vehicle Expenses: If you have to travel for the sake of your profession, then you can claim tax deductions by attributing it to vehicle/travel expenses. If you use a vehicle for work purposes, then you can deduct the cost of fuel and maintenance. You will also be able to deduct the cost of any transportation that you take, such as taxi fares, flight fares, tolls, etc.
2. Tools and Equipment Expenses: You can also deduct the costs of tools and equipment that you need for your business. You can claim tax returns for electronics such as computers and phones as well. You can also claim tax returns for equipment such as construction tools, plumbing tools, landscaping tools, etc. Every year, you’ll be able to save $1000 at least. You can even claim depreciation up to $20,000.
3. Educational Expenses: As a self-employed person, you must also be enrolling in courses and spending money to upgrade your professional certification. You can claim tax returns for these purposes as well. Self-education fees such as course fees, stationery costs, electronics costs, etc. can be included in this. You can use all your educational expenses to reclaim a large portion of the taxes that you pay on an annual basis.
4. Superannuation Funds: Every employed Australian citizen sets aside a part of their salary for a retirement fund, which is generally in the form of a superannuation plan. If you’re doing so as a self-employed person, then you can claim tax returns on it. Make sure that you follow all of the rules given by the ATO. It is also a very good idea to consult personal tax accountants Perth.
5. Home Office Costs: Many professionals have a home office in their home. A home office has become a necessity now, ever since the start of the COVID-19 pandemic. Having a home office will help you to avoid paying rent as well. You will be able to claim tax returns if you set up a home office. Utility costs, office equipment, furniture costs, etc. can all be included in this.
6. Physical Assets: If you establish a business, then you can also file tax returns for any large capital expenditures that you incur on physical assets. If your business is new and if your capital expenditures are less than $6500, then you will be able to get back every dollar. Over the years, you will be able to get tax deductions that are 15% or 30% of your total cost.
7. Utility Bills: You definitely have to pay utility bills – irrespective of whether you have a home office or leased space. In fact, utility bills are one of the highest recurring expenditures that you will have to incur. As a result, it is a very good idea to include these expenses while you are filing your tax returns. You will be able to use utilities and get large deductions.
8. Depreciation of Assets: It is a fact of life that assets that are purchased will depreciate in value over the course of time. Any capital asset that is worth $300 or more can be claimed and deducted in an instant. For large assets that are worth $300 and above, you can take advantage of the tax returns over the years. You can claim the depreciation of the assets also.
9. Tax Offsets: Lastly, you can also take advantage of the tax offsets that are being offered by the ATO. You can contact a tax return accountant to see what offsets you are personally eligible for. The offset that you can enjoy is going to depend on your personal situation and that of your spouse or family’s. Talk to an attorney or accountant to take advantage of offsets like these.
These are the 9 ways in which you can claim large deductions while paying your income tax in Australia. You should enlist the services of the best personal tax accountants Perth has to offer and enjoy the significant amount of savings that they will offer.