⏱ 5 min reading
Generally, when preparing your tax returns, you want to claim as many suitable businesses expenses as you can. This is because your tax is directly determined by how much your “taxable profit” is.
Taxable profit = Income – Expenses
So, the more business expenses you are able to claim, the lower your taxable profit, which in turn means, less for the tax man.
But it is very important that you do not mix your private expenses with your business expenses. You do not want to commit tax fraud, or be caught lying on your tax return. The consequences can be severe.
But, if you do have business expenses that are eligible, then you should definitely make the effort to claim as many as possible. The expenses one can claim for their business, greatly depends on the industry and the nature of the business, but below you can find a list of some of the most common expenses that freelancers and self-employed people should consider:
- Electronics hardware (depreciation)
- Electronics repairs and maintenance
- Home Office (utilities)
- Home Office (repairs, maintenance, fixtures)
- Professional services
For a more detailed explanation for each category, along with some examples, please see below:
Please remember that you need to remember to keep track of all of your business expenses and their receipts. You will need to keep them for multiple years in case of an audit by the tax authorities. They act as the evidence justifying your decisions in claiming them as a business expense. The onus of proof is on you, the taxpayer.
As a business owner, you should really make an effort to arrange the business receipts and invoices in a nice and orderly manner, along with all the other relevant business information. Accountants do not appreciate receiving a shoe box full of unsorted and messy receipts and paperwork. In the near future, we plan on releasing more features on our website, that will help people better prepare their digital shoe boxes.
In the meantime, if you have any questions or topics you would like us to write about, please get in touch. Thank you for reading.