Assistant Commissioner Peter Holt says the ATO understands that small businesses have a lot on their plate with the day-to-day running of their business and “that’s why we’re focusing on addressing common issues we see when small businesses lodge their returns so that we can support them to get it right”.
He says the top three issues that the ATO sees when small businesses lodge their tax returns are: Failing to report all of their income; not having the necessary records to prove small business expenses claims; and claiming private expenses as business expenses
“For example, you’re a sole trader landscape gardener who usually works in Perth but took on a job in Broome. While you’re up in Broome, you do some sightseeing. That’s a private expense and you can’t claim the cost of that in your tax return,” Mr Holt said.
He said there were three golden rules to remember about claiming deductions.
“One, the expense must have been for your business not yourself. Two, if you use something for business and private purposes, you can only claim the portion that is related to your business, and three, you need a record to prove it.”
For more, visit visit ato.gov.au
Golden rules for deduction on tax
Assistant Commissioner Peter Holt says the ATO understands that small businesses have a lot on their plate with the day-to-day running of their business and “that’s why we’re focusing on addressing common issues we see when small businesses lodge their returns so that we can support them to get it right”.
He says the top three issues that the ATO sees when small businesses lodge their tax returns are: Failing to report all of their income; not having the necessary records to prove small business expenses claims; and claiming private expenses as business expenses
“For example, you’re a sole trader landscape gardener who usually works in Perth but took on a job in Broome. While you’re up in Broome, you do some sightseeing. That’s a private expense and you can’t claim the cost of that in your tax return,” Mr Holt said.
He said there were three golden rules to remember about claiming deductions.
“One, the expense must have been for your business not yourself. Two, if you use something for business and private purposes, you can only claim the portion that is related to your business, and three, you need a record to prove it.”
For more, visit visit ato.gov.au