With the global economy just now recovering from a scary position over the last few years, most small businesses in South Africa are in a very difficult position. Since small businesses fail at a higher rate than most other businesses, it is important for business owners to make good decisions when it comes to saving money and cutting costs. One of the most effective ways of doing that is to make savings count on your tax returns. Here are a few easy tax saving tips that you can implement in your small business:
1. Home office
Having a dedicated space in your house designated solely for the purpose of running your business is one of the easiest ways to get a break on your tax. Not only does it give you an affordable cut on your return, but also gives you a place to do your work from when you’re not at the office; and lets face it, we all enjoy being away from the office sometimes. You will need to set out the space clearly though, since you cannot claim a return on a space in your home if it just happens to have a computer in it.
2. Office supplies
Even if you don't take the home-office deduction, you can deduct the business supplies you buy. Hang onto those receipts, because these expenditures will offset your taxable business income. Supplies such as printer cartridges and toner, as well as printers, bigger office machinery and even computer equipment, can also be claimed for, so make sure to keep a list of everything you bought, even if it was bought out of your own pocket.
3. Meals and entertainment
General tax law states that any business expense can be deducted from income if that expense was incurred in the process of generating income (any income not capital in nature). This means that any lunch or coffee expenses you incur while entertaining potential clients, going on lunch meetings and brainstorms with your sales team, can all be deducted from your tax return as a business entertainment expense.
4. Travel expenses
Much like the entertainment deduction, any travel costs incurred in the process of generating income can be deducted (at different levels, depending on the type, duration and extent of the travel) as a legitimate expense. Not only fuel, but also flights and accommodation can be deducted, so be sure to keep track of all your travel logs, fuel costs and the expenses incurred at your place of accommodation. Travel expenses such as daily travel can also be deducted, and are perhaps the most common. Using an electronic trip logger such as the Little Logbook, which uses GPS coordinates to automatically record your entire trip will allow you to keep an incredibly accurate account of where you’ve been, and which of your trips were business related.
5. Educational costs
Small business owners can deduct employee's educational expenses if the courses apply to their job, and self-employed business owners can write off some of their own educational expenses. Transportation to and from the classes may also be deductible.
If you would like to purchase a Log Book for your business travel expenses please visit our website at : http://littlelogbook.net/
