How Can Small Businesses Reduce Taxes?
In Sydney, Australia there a lot of small businesses and the number of which, is growing very fast. When you are starting a business, the first concern that will strike your mind is paying tax. In Australia the tax is fairly depends upon the income of a person or a business, but as a small business owner slight tax deduction can be heavenly for you.
Now, as mentioned before, a small business will have tax on business income and there are few brackets of income within which it will depend how much taxes are due. Although this seems like a well-fortified system, there are a few ways you can reduce taxes from your small business at the end of the financial year when you are going to do the tax deductions.
Asset Depreciation
You can claim asset depreciation if your turnover is under $10 million, this is also called instant asset write-off. The procedure is to invest in an asset which can be up to $20,000 until the end of financial year and then claim back the full amount on tax.
Tax Offset
Small business tax rate is not much in Australia, but it can be overwhelming if you are a sole trader in your own business. Not to worry, you can claim tax offset for small business, which is a very efficient way to reduce your tax up to $1000 a year while doing tax deductions in Australia. When you apply for this, ATO will calculate your offset based on what information you have provided to them.
Contributing to Superannuation
Before the end of a financial year comes knocking on the door, it will be wise to do some concessional contribution to the superannuation. This contribution can be capped to $25,000 and for all individuals regardless of the age. This is because, tax on super contribution is like a lot less (15% only) than the tax rate on income.
These are few of many ways using which we can deduct your tax from your small business. At Ample Accounting & Taxation Services, we have a specialized people with small business tax deduction checklist and we would like to help you reduce your taxes so that you can do business in Australia much more stress freely and earn more money and grow larger. So, come visit us in our Bankstown office or call us, we are here to help you throughout the year.
