P. 07 5536 2111 | F. 07 5536 3933
sullivan rees logo
E.

Reducing errors when claiming business expenses

The ATO has identified particular areas relating to business expenses that are commonly entered incorrectly in tax returns. Owners should take the time to carefully review tax returns to ensure all information is correct.

Individuals who use a motor vehicle entirely for their business can claim a deduction for the whole amount. However, if they use the vehicle for a mix of business and private use, they will need to divide the expense amount and only claim the business portion.

Business expenses must be kept separate from an individual’s private expenses, such as personal rent, fines, travel, food and renovations of a private residence. Those who operate their small business as a company or trust need to be aware that paying private expenses from these accounts may have other tax implications such as fringe benefits tax and shareholder loans.

In the event a business is upgrading its accounting software, remember to check that business and private expense codes are correct. The business expenses must be claimed at the GST exclusive rate if they are registered for GST, not the GST inclusive rate.

Small businesses should note that falsely or incorrectly claiming expenses is not something the ATO takes lightly. Penalties can apply based on the extent of the misinformation.

Accounting
services

In the constantly changing business environment, you can rely on our business services team to be expert, up-to-date and ready at hand to assist you with your business matters...

Business
services

Thinking strategically about future changes in the marketplace can be the key to running a sustainable business...

company
secretarial

Communication and effective administration are essential elements of a successful organisation. Regardless of the size of your business, we are ready to support you...

finance
services

We can help you to secure the essential finance for you and your business....

managing your wealth

We can help ensure that your personal wealth is managed as tax-efficiently as possible. ...

tax services

We regularly deal with a broad range of personal and corporate taxation issues and make a point of understanding the individual needs of every client. Whether you need advice on company tax, personal tax effectiveness or indirect taxation....

specialist services

In addition to our normal services, we have a developed specialist knowledge and expertise in Self-Managed Superannuation Funds....

firm news

Using your tax return wisely

Posted on July 8, 2019 by admin

Getting your tax refund back is exciting, but as tempting as it is to splurge, consider other ways you can put that money to good use. It is easy to get caught treating your return as extra money when you shouldn’t see it any differently than your regular paycheck. Give the money a purpose by thinking about your personal financial situation and determining your needs.

Emergency fund:
An emergency fund can make all the difference if a difficult financial situation comes up, acting as a backup in the case of an emergency such as losing your job or medical costs. Building an emergency fund with enough money to cover at least three months worth of expenses is a good starting point. Make sure the money is added to a high-interest savings account to utilise compound interest. If you are contributing regularly to this fund, adding money from your tax return can boost it above schedule.

Make debt repayments:
With a bit more money at your disposal, now is the time to make repayments on debts you may have. Start with the higher interest debts and work down, your interest repayments will drop when you lower your outstanding balance. These debts can be things like credit cards, personal loans, outstanding bills or mortgage repayments.

sullivan rees