Maximising your small business tax deductions: A smart strategy for financial success

The end of tax season is nigh, so it’s best that you get your ducks in a row now. But, before you file that ever-important tax return, you might be interested to know a little bit more about tax deductions.

There are a whole host of business expenses that you can claim back from SARS, and it really does pay to know which what you can write off and how.

How do I claim tax deductions?

If you want to get your hands on a big, juicy tax return, then you’ll need to meet certain eligibility criteria:

  • You must operate a legally registered business entity. After all, you have to have a tax bill in order to claim any tax deductions. 
  • The business expenses you intend to deduct must be legitimate business expenses that are directly related to the operation and generation of income for your business. Personal expenses don’t count (sorry).
  • You must maintain accurate and detailed records of all income and expenses related to your business. Proper record-keeping is essential to substantiate your tax deductions.
  • Your business must be in compliance with all tax obligations, including paying any taxes owed on time, adhering to tax regulations, and, most importantly, filing your annual tax returns.
  • Your tax deductions must be claimed in the correct tax year when they were incurred.
  • The expenses you are trying to claim as tax deductions must have a direct connection to your business activities. For example, if you buy a swanky new BMW and claim that it is used to transport your staff, you better be able to prove it!
  • You must adhere to any legal requirements related to certain tax deductions, especially if you are claiming deductions for employee benefits, as they must be in line with labour laws and regulations.

Which of my business expenses can be written off as tax deductions?

Now that the rules and regulations are out of the way, here are the types of business expenses you can claim back from SARS. You can find a few other deductible expenses here.

Operating expenses

Operating expenses like rent or lease payments, utility bills, office supplies and stationery, telephone and internet bills, and depreciation on business assets are all tax deductible.

Salaries and wages

Your employees are your greatest asset, and they are probably also your biggest business expense. Luckily, salaries, wages and contributions can all be claimed back from the tax man as tax deductions.

Vehicle expenses

If you do end up using that swanky new BMW for business and pleasure, then you can deduct the portion of expenses that relate to business use. You can also claim business-related vehicle expenses like fuel, maintenance and depreciation.

Travel and entertainment

Entertainment expenses for clients and employees can be written off as tax deductions, but don’t get carried away. There are limits to how much you can claim back and certain conditions you will need to meet.

Professional fees

Most business owners hate paying for lawyers and accountants, so they can at least find some solace in the fact that these expenses can be written off.

Marketing and advertising

Marketing and advertising often don’t come cheap, especially if you outsource these services to a top-notch agency. Thankfully, the tax man can ease some of your burdens, as you can claim these expenses back as tax deductions.

Start your business on a high after tax season with GroWise Capital

If you leverage these tips, you should get a nice, healthy tax return. Unfortunately, it probably won’t be enough to make any substantial changes to your small business. That’s where we come in.GroWise can provide your business with the capital it needs to increase your staff complement, expand your premises or otherwise expand and enhance your offering – and quickly, too. You could be spending as much as R3 million in as little as 45 minutes! So get in touch with us today or apply online to see if your business qualifies for funding.

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