Tax deductions are an important annual consideration for most people. Whether you are lodging your personal tax return or preparing your business taxes for the year, deductions are a vital way to save you money or increase your possible refund. Unfortunately, many taxpayers don’t know what they can or cannot claim as a deduction on their taxes. As a result, people either end up missing significant deductions and leaving refund money on the table or claiming the wrong deductions and opening themselves up to audits.
At Northcity Accountants, we want to help you get your maximum refund, and we want to do it at least in part by helping you understand how deductions work. Our tax agents in Mernda know the ins and outs of both business and personal tax returns. They can take the lead in your tax planning process, find you the best deductions and get you the refund you deserve.
Understanding Tax Deductions
When you lodge a tax return, you are telling the government how much money you made in the previous year—either personally or business-wise. You need to report your earnings or revenues so that they can be assessed and taxed. However, certain expenses can figure into your tax return. These costs either take the form of direct business expenses or expenses that are, in the words of the Australian Taxation Office, ‘directly related to earning your income.’
It’s a good idea to consult a tax consultant in Mernda about your deductions, to make sure you aren’t missing anything or claiming something you shouldn’t. However, in most cases, personal write-offs will take the form of travel or car expenses, work clothing, home office costs, education expenses, necessary tools or equipment for your job, charitable donations or investment expenses.
For business taxes, the deductions are somewhat different, which can create confusion if you are used to personal tax returns and are lodging business taxes for the first time. Think about what your company spent money on this year to remain operational. Most expenses, from supplies to equipment repairs to employee salaries to business travel. However, there are expenses you need to make sure you don’t claim as well, like entertainment spending or anything that might drift into the realm of personal expenses.
After a few years of lodging personal and/or business taxes, most taxpayers start to get the hang of deductions and what can or can’t be claimed as a write-off. If you still feel confused, unsure or uneasy about your deductions, though, it’s worthwhile to invest in your peace of mind. A tax agent in Mernda will help you find as many deductions as possible while avoiding the pitfalls that commonly accompany this part of the tax preparation process.
At Northcity Accountants, our tax accountants in Mernda are happy to help you through the deduction process. We even offer a mobile tax accountant service in Mernda, which means that we can come to you if you can’t spare the time to visit our offices. To learn more, call us today on 03 9404 2737.