Are you confident about what you can and can’t deduct from your business expenses to arrive at your net profit or taxable income?
The IRD website has lots of information, but we find many business owners still don’t fully understand what they can claim in deductions. Of course, the list is extensive and that’s where hiring a Chartered Accountant to help you with your end of year financials, comes into its own. We make the whole process less painful for you and ensure you are able to claim everything you’re due.
Three of the main areas of business expenses where you are able to claim deductions are use of home office, motoring costs and travel/entertainment costs, but here are three things you might not know, one for each of those aspects…
- You can still claim for the use of your home office even if you have a business premises. If you have an area at home with a desk, a computer, a telephone and storage that is all used for business purpose this can generally be claimed.
- Before deciding whether to purchase your vehicle in your business’ name or whether you own it personally and claim motor vehicle expenses we suggest you talk to an accountant, there are pros and cons to consider with each scenario, we can help you decide what’s best for your business… Now here’s something you might not know… The IRD Mileage rate for self-employed people has recently been reduced from 77 cents per kilometre to 74 cents per kilometre. As a self-employed person you can only claim up to 5000 km per year. Any distance over that you have to use an approach based on actual costs.
- Mixing business with pleasure… In New Zealand if you take a client out for a meal you can only claim 50% of the costs of that entertainment in your tax deductions. If you are overseas on a business trip, however, you can claim it all.
These are just three small tips, and our team at Johnston Associates South have years of experience and are able to offer you the benefit of their knowledge, contact us to find out how we can help you maximise your claims and deductions.