Busi­ness de­duc­tions

Southern Riverina news - - REAL ESTATE -

You can claim most ex­penses you in­cur in run­ning your busi­ness as de­duc­tions to re­duce your tax­able in­come.

As a gen­eral rule, you can claim your dayto-day busi­ness op­er­at­ing ex­penses in full, in the year you in­cur them.

How­ever, the costs of cap­i­tal items (such as build­ings, ma­chin­ery and equip­ment) are gen­er­ally claimed over a num­ber of years.

Home of­fice ex­penses for a home-based busi­ness: If your home is also your place of busi­ness, you can claim in­come tax de­duc­tions for a por­tion of the costs of own­ing, main­tain­ing and us­ing your home for this pur­pose. When you sell your home you may be li­able for cap­i­tal gains tax.

In­come and de­duc­tions for busi­ness: You can claim de­duc­tions for costs in­curred in run­ning your busi­ness, pro­vided the ex­penses are not of a pri­vate or do­mes­tic na­ture.

Losses: If you op­er­ate a busi­ness that makes a loss, you can carry for­ward that loss and may be able to claim a de­duc­tion for it in a fu­ture year. The rules dif­fer for dif­fer­ent busi­ness struc­tures. If you’re a sole trader or a part­ner in a part­ner­ship, you may be able to claim busi­ness losses by off­set­ting them against other in­come — for ex­am­ple, in­come you earn from salary or wages.

Re­pairs, main­te­nance and re­place­ment ex­penses: You may be able to claim a de­duc­tion for re­pairs to ma­chin­ery, tools or premises you use to pro­duce busi­ness in­come as long as the ex­penses are not cap­i­tal ex­penses.

Salary, wages and su­per: You can gen­er­ally claim a de­duc­tion for the salaries and wages you pay to em­ploy­ees, and for su­per con­tri­bu­tions you make for them and for cer­tain con­trac­tors. If you’re a sole trader, you can usu­ally claim a de­duc­tion for your own su­per con­tri­bu­tions in your per­sonal tax re­turn.

Speak to your lo­cal tax agent for more de­tails.

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