Claiming business expenses at tax time
Reducing errors when claiming business expenses
The ATO has identified some common tax return errors when it comes to claiming business expenses.
- If you use a motor vehicle entirely for your business, you can claim a deduction for the whole amount. If you use it for a mix of business and private use you will need to apportion the expense and only claim the business portion.
- You must keep your business expenses separate from your private expenses such as private rent, fines, travel, food and renovations of a private residence.
- If you are upgrading accounting software, it is important to check that business and private expense codes are correct.
- Your business expenses must be claimed at the GST exclusive rate if you are registered for GST, not the GST inclusive rate.
- If you operate your small business as a company or trust, paying private expenses from these accounts may have other tax implications such as fringe benefits tax and shareholder loans.
Flor-Hanly Accountants in Mackay can help you get it right by advising you on what you need to satisfy the following three golden rules:
- the expense must have been for your business, not for private use
- if the expense is for a mix of business and private use, you can only claim the portion that is used for your business
- you must have records to prove it.