Learn about Tax and Your Life Can Become Rather Interesting

For some reason, when you learn about tax or take a tax course, you start paying more attention about your spending in other areas as well. After all, taxes are a form of accounting that causes us to become quite imaginative, especially if we are trying to reduce our overall tax expense by claiming certain deductions. While standard deductions, after a while, become obvious to include, you might not know that some business people claim deductions in Australia that sound rather bizarre too.

The Tax Depreciation Concession

If you are a small business owner, especially, claiming deductions is a practice you simply cannot avoid, particularly with the government’s recent introduction of a tax depreciation concession in the amount of $20,000. In turn, the government is sharpening its focus on what deductions are permitted and what deductions are not. Therefore, the recent concession is good news for art and gallery owners.

Decorations for the Office

However, that being said, you can only deduct a painting if it is used to decorate your business. That means you have to be careful about not towing the painting or art, at some point, to your residence or to a venue that is not considered a business. If you have a home office, the deduction will not count. Only buy the painting if it will be used for commercial business decorating purposes.

Deducting a Backyard Studio

One Australian accountant noted that a number of his tax clients were purchasing prefabricated art studios to place in their backyard before including them as deductions on their tax form. The studios frequently cost under $20,000, thereby making them eligible for a depreciation concession although they may also cost well over the allowable $20,000 amount. Any studios that resemble a granny flat, complete with bedroom and bathroom, will raise a suspicious eyebrow at the tax office. As a result, the deduction could be denied.

Keep Your Invoices and Receipts

Small business owners can also deduct the expense of food and wine if they are travelling for work and staying overnight during their travels. Just make sure that, if you do travel extensively and eat out, that you keep all your invoices and receipts. As there is not a specific distance that a business owner has to travel away from his home, accountants suggest a distance of 100 kilometres.

Working Animals

A dog’s veterinarian bills and food can also be deducted on Australian tax returns, provided the dog is used is a guard dog for your business or is considered a working dog. You may even bring the dog home during the weekends when you are not at work. He just cannot be solely the family pet. Some taxpayers have claimed their cats to be “working” animals. However, the tax department simply does not have cats listed under this kind of classification.

Should you work in the Great Outdoors, then you are allowed certain deductions in this area too. Sunscreen, sun-shading hats and sunglasses can all be deducted. Games that are played at work can also be included in your tax deductions.

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