Accounting for Small Business: Essential Australian Tax Breaks You Need to Know

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Are you running a small or a medium business? We know it can be rather difficult to keep up with all the tax breaks and incentives provided to small and medium businesses. However, as a company, you stand to gain a lot from these incentives and tax breaks- and you need to know about all the benefits you can reap.

When it comes to accounting for small business or medium businesses, here are some of the most important tax breaks you need to know about:



General Expenses

As long as an expense was incurred in the process of earning an income, it can be deducted from your tax. In Australia, there are two categories of general expenses you can claim: revenue expenses and capital expenses.

Revenue expenses are what you spend on day-to-day operations (like travel, wages paid, utilities, bank fees, etc). You can claim them the year they are incurred.

Capital expenses are expenses made towards assets that are long-term, such as buildings, computers, vehicles, etc. Capital expenses can be claimed at different rates, in different times, depending on the assets themselves.



Small Business Tax Deduction

The Australian government provides a deduction of $20,000 to small businesses, to encourage them to invest more in assets. A small business will be able to claim an immediate deduction for the cost of each depreciating asset that they purchase for less than $20,000 if the business’s revenue is less than $2 million, and when the business have purchased eligible assets for use of the company.



R & D Tax Incentive

The research and development tax incentive is to encourage companies to engage in R&D benefiting Australia, by providing a tax offset for eligible R&D activities. It has two core components which are:

  1. A refundable tax offset for certain eligible entities whose aggregate turnover is less than $20 million
  2. A non-refundable tax offset for all other eligible entities


Government Grants

There are a number of government grants offered by different wings. You can find out more about these by visiting the government website. Small businesses have a number of grants- for creating employment, or installing safety equipment.

If you’re unsure about what tax rebates you can claim, get in touch with DSV Partners – one of the most trusted Sydney accountants, immediately!



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