Tax season may not seem like much fun to you, but for our Australian small company accountant, it is the most enjoyable time of the year.

Many small business owners rely only on the tax benefits their company will receive in the future to keep them motivated.

Tax deductions are one way for small business owners to save money, which is something they all want to accomplish. Unfortunately, some business owners are unaware of how many business expenses are tax deductible, and as a result, they might lose out on significant opportunities to save money.

1. Business assets

This provision can enable you to write off qualified business assets, including machinery, equipment, and automobiles, in the year of purchase.

You might be eligible to write off asset purchases on your tax return if your company meets the eligibility requirements. This is given that they are initially put to use or installed and prepared for use within the ATO's prescribed time frames.

There may still be time to make purchases for your company and deduct the appropriate amount from your income for that year. Because the requirements are complicated and not all purchases or expenses will qualify, you should get your own independent tax advice before purchasing the item.

2. Home for office expenses

It's hardly surprising that office supply companies have experienced a rush of customers because so many Australians, including small business owners, have chosen to work from home. Computer monitors, desks, and other items have sold out in record time.

Your purchases and setup expenses will be tax deductible because they are still ultimately related to business. It follows that your new desk, keyboard, computer monitor, and camera can still be written off as a business expense even though they are situated in your house.

3. GST

The fact that eligible businesses are only required to account for GST once they have received payment for it makes it easier to handle your obligations in regard to the Goods and Services Tax (GST). This makes it simpler for you to fulfil your GST-related requirements.

The ATO will total up all of your instalment payments and send them to you if you want to pay the GST in instalments.

Pay-as-you-go tax instalments are available for use by small enterprises. According to a formula generated from the company's most recent tax return assessment, these instalments allow the company to pay its taxes on a quarterly basis. Pay-as-you-go tax instalments are advantageous for small enterprises.

4. Maintain records

We all realise that rax can be challenging, but you're only making things harder for yourself and your company. It's crucial to keep track of all your earnings and outgoings during the entire year.

Generally speaking, you must retain your tax records for five years. Any claims you make in your BAS must also be backed up by written documentation. Tax invoices and receipts are examples of written evidence.

5. Prepaid expenses

Even though operating your own business might be costly, you may be able to deduct some of the costs from your taxes, even those you have already paid for.

The amount of your permitted deductions for the fiscal year in which they are paid may increase if you prepay any expenses before June 30. Expenses with a service period of 12 months or fewer are considered eligible, such as annual policies, utility bills, and professional subscriptions. Remember that if you claim them this year, you won't be able to claim them the following year, which means you could owe more in taxes the following year.

Conclusion

There are many worthwhile methods to use tax deductions to enhance your tax return if you play it smart. The best course of action is to seek the counsel of your small company accountant or tax agent if you are even slightly unsure or uncertain about what you can deduct.