Feeling confused about what expenses you can claim as a tax deduction? You’re not alone. Many entrepreneurs think they’re missing out on money they could keep in the bank. In this guide we break down the most common write‑offs, explain how an owner’s draw is treated, and clear up when you can claim a GST refund. All the info is practical, not theory.
First, look at every cost that directly helps you earn income. Office rent, utilities, internet bills, and a portion of your home‑office expenses are all deductible if you have a proper receipt. Got a laptop or a phone used for business? That purchase counts too, and you can spread the deduction over the asset’s useful life if it’s a big ticket item.
Travel and meals are another big area. If you fly to meet a client, book the flight and keep the ticket. Meals cost more than just the food—include the tip and any delivery charges, but limit the claim to 50 % of the total bill. Advertising, whether on Google, Facebook, or a local newspaper, is fully deductible, as long as you can prove it was for business promotion.
Don’t forget professional fees. Accountant fees, legal advice, and consultancy charges all reduce your taxable income. Even the cost of a subscription to a business‑related magazine or online tool can be written off. The rule of thumb: if it’s ordinary and necessary for your trade, you can likely claim it.
If you run a sole proprietorship or a partnership, you probably take money out of the business as an owner’s draw. Unlike a salary, the draw itself isn’t taxed at the time of withdrawal. The profit of the business is taxed first, and the draw is just a distribution of that after‑tax profit. Keep clear records so tax authorities see the draw isn’t being disguised as salary.
For GST‑registered businesses, a refund can be a hidden cash boost. If you’ve paid more GST on purchases than you’ve collected on sales, you can claim the excess back. Common scenarios include exporting goods, where GST is zero‑rated, or buying capital equipment that carries a higher rate than your sales. To qualify, you need a valid GSTIN, proper invoices, and a timely filing of the refund claim.
Practical tip: file your GST return monthly and keep a spreadsheet of all input tax credits. When the numbers show a surplus, submit the refund request through the GST portal within the prescribed window. The process is straightforward but missing a document can delay payment for weeks.
Finally, stay organized year‑round. Use accounting software that tags each expense with a category, attach digital copies of receipts, and reconcile bank statements monthly. When tax season arrives, you’ll spend hours, not days, pulling everything together. And remember, a well‑documented deduction is far better than an unanswered audit question.
By focusing on these key areas—common write‑offs, proper handling of an owner’s draw, and timely GST refunds—you’ll keep more profit in your pocket and avoid costly mistakes. Tax deduction doesn’t have to be a headache; with the right habits, it becomes just another part of running a smart business.
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