What Freelancers Should Know to Make the Most out of Tax Time
For many businesses out there, end-of-the-year taxing can be a real headache. Not only is it tiring to dedicate time to take care of taxes, but those who are not too diligent can miss out on tax deductions that they could have claimed. This is especially true for freelancers who must deal with taxes all by themselves.
That said, if you are a freelancer, do not be lazy in this aspect! This is your chance to make the most out of your claims for the end-of-financial-year tax returns. If you do not know how to do that, here is a guide to help you:
What you can claim
If you are working at an office, here are a few things you can claim:
If you are paying for parking at a place to work, you can claim the associated costs for a deduction! If you are taking an online course for work-related reasons, you can also use that for the same reason. From the equipment you use to work, such as laptops and office chairs, to the bills for the internet and phone, all of these costs can be used for tax-deduction purposes, helping you to reduce your liability and leaving you with more money in the end.
To add to this, if you plan to outfit your office, you can also claim any cost you would have spent on it that can be considered as office equipment. Just note that if you do plan to sell this office, later, you are going to have to pay Capital Gains Tax.
There are some things that, surprisingly, can also be used to claim if you are working from home. For example, the rent you are paying can be used for tax deductions, along with utility bills, repair costs, cleaning costs, and even travel expenses when you go somewhere else for business purposes. If you want to make the most of your claims, you can even calculate the house insurance according to the percentage of house space you dedicate to work.
To ensure that you make the most out of every tax period you go through, here is some general advice you should keep to heart.
First, you should always keep your receipts. Not only are these proofs of your purchases, but they’re also handy when trying to record them on accounting software.
Second, you should keep your expenses and income in separate bank accounts. This way, your personal account does not mix with the activities related to business, ensuring that you can make tax claims without running into trouble.
Third, always consider using software to assist you with taxes. Not only will it make life a lot easier, but it will also make sure that you do not struggle to try to stay on top of all your bills.
Fourth and finally, hire an accountant to help! You do not need to work with one all year long, but you will need one when taxes are due. With their help, you will not miss out on any tax deductions.
Tax time can be a headache for anyone, especially for those who either do not prepare for it or have no idea about the claims that they can make. Remember what we have shared with you to ensure that you do not lose money unnecessarily and keep your sanity going through the process.
That way, you can make all the claims you're eligible to, reducing the tax you have to pay for in the end while also starting the next financial year with a boost of money that you would have just saved.
Are you looking for top accountants at Gold Coast to help you with your taxes? We at New Wave offers professional accountants that will make sure you get all the claims you are entitled to! Reach out to us today.