Professional Beauty July/August 2019

BUSINESS
GETTING YOUR
FINANCES IN ORDER
Nobody wants to pay more tax than they have
to and the key to minimising your taxes is to
ensure that you claim all the deductions you’re
entitled to. Mark Chapman reveals how to
keep your tax in check.
The Golden Rules of Tax Deductions
If you want to make a claim for work-related
expenses, you need to follow the three golden rules:
• The expense must relate to your work
• You mustn’t have been reimbursed by your
employer
• You must be able to prove that you spent the
money. That means that you must keep receipts,
invoices or statements to demonstrate that you
actually incurred the expense.
H&R Block’s tip is to keep electronic copies
of all documentation relating to expenses. Paper
receipts get lost or fade, so keeping everything
together on your phone or computer will save time
and effort when you come to complete next year’s
tax return.
Get Help
There’s a reason why nearly 75% of people use
a tax agent to help them do their taxes. Tax is
complicated and stressful and if you do it yourself,
you’re likely to make a mistake. You might claim
something you weren’t entitled to and find yourself
audited by the ATO or you might miss out on a
deduction you could have claimed but didn’t realise was available to you; the
result is a lower refund than you could have got. Using a tax agent takes away
the stress and opens up a whole world of expertise to guide you through the
process, so you can be sure you’re claiming everything you’re entitled to. You
wouldn’t generally choose treat a medical condition yourself, you’d see a doctor
so why should tax be different? Get expert advice and the fee will generally be
more than covered by the bigger refund and the peace of mind.
If you use your car as part of your work, for instance to travel to clients,
between jobs, to expos or to collect supplies, you can claim the costs of your
work-related journeys. If you use your own car, either claim 68 cents per
kilometre up to a maximum 5,000 kms or keep a logbook and claim your
actual expenses. You can also claim for parking, tolls and public transport if
you don’t use your car.
You can’t claim the costs of traveling to and from work (the daily commute)
though you might be able to make a claim if you’re required to transport
equipment which you can’t safely store at work (TIP: the ATO checks such
claims closely so make sure you can prove your claim).
Equipment
You can claim the cost of buying tools and equipment that you use in the
beauty business. If the item costs $300 or less, you can claim it straight away
and if the cost is more than $300, the cost is depreciated over several years.
If you’re in business on your own account, rather than being employed by
someone else, you can immediately write off all items of equipment costing
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