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4 ways to help reduce your tax bill

· Costs,Cloud Accounting,Small business,Bookkeeping

If you own a small business, nearly any purchase that helps generate income is tax deductible. While you need to be careful to ensure that these expenses are genuinely claimable, some of these are commonly overlooked and could save you money come tax time. Here are a few tax deductions that you shouldn’t forget, as well as some tips that could save you money in the long-term.

1. Work from home

When you run a business out of your home, you can claim some of your electricity and water bills. You can also claim home-insurance premiums, provided the policy covers business use. The amount you can claim is often based on the floor space of your home office. You might also be able to deduct some of your rates and bond interest. However, be aware that this can create capital-gains tax implications when you sell the house.

2. Transport from A to B

Most business owners know petrol costs are tax deductible, but many neglects to claim tolls when they’re driving to a client site to undertake work. They can also forget to deduct the cost of train and bus tickets when they take public transport to a job. The simplest way to avoid this mistake is to get a business credit card and use it exclusively when paying for travel. If you travel via Uber/ My taxi app, create a business profile in the app and track your work trips easily. If your business takes you into the air, remember you can claim the cost of membership fees for lounges.

3. Charitable donations

Donations to charities are a kind way of giving back to others. Just make sure that when you do so it is to a reputable and registered organisation. This not only ensures that your money gets to where it is meant to be going, but also that you are then able to deduct a portion of these contributions against your normal income tax, provided you are issued with a donations certificate from the non-profit organisation you donated to.

4. Ensure you have the best accountant to help with your needs

Accountants should never charge you a percentage of the refund you get back – EVER! No accountant or tax practitioner should guarantee a refund. You are either due a refund or you are not. It is a simple matter of law and application. Submitting claims incorrectly, or claims which you may not be entitled to, may be approved initially by the revenue and result in a nice refund. However, these stand every chance of being picked up as incorrect months (or years) later. This could lead to unnecessary and often severe penalties and interest.

Some may say filing a tax return is easy, and sometimes it is, but for a few hundred euro (depending on the work involved) making sure it gets done correctly may be a better option. Particularly if you have a number of existing or potential claims like rental properties, investment income and/or other income.

Lastly always remember you are responsible for your tax return, not your accountant. So make sure it gets filed and contains accurate and complete information.

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