The time of year when tax returns are due is a time that many people dread. After all, it's not the most enjoyable activity, and it's never nice to be reminded of the tax you have to pay. Nevertheless, it's an important task to get done as soon as you can, as lodging it too late or failing to do it at all can land you with a big fine.
Something that can make the process at least a bit more pleasant is that there are certain things you can claim tax deductions for. If you're not including all the possible deductions relevant to you, then you're not getting the tax refund you should and are essentially throwing away money. Here are some of the deductions that self-employed people can often claim, to help you maximise your finances.
Expenses for working from home
If you work from home at all, you can claim some of the expenses this incurs as tax deductions. For example, you might be able to deduct electricity costs, phone bills and equipment like computers, as long as they're directly related to your work. As someone who's self-employed, you can also sometimes claim a portion of your rent and other bills to cover the cost of running your home office.
Because you need to be careful not to include any living costs that aren't work related, it can be complicated to work out, so it might be useful to get advice from a professional.
Gifts to eligible organisations can be included as tax deductions as long as you don't get anything in return and it's purely for charitable purposes. This can even include shares or property, so don't forget to add anything relevant.
Some vehicle expenses
As a self-employed person, the travel costs you can claim as tax deductions are limited. However, there are still a few situations where you can include them. You can't deduct tax for travelling to see clients if this is a normal part of your business, but you can claim for conferences and training, for example.
Cleaning work clothing
If you need specialist clothing to carry out your work, for example protective equipment, you'll probably remember to include the cost of purchasing it. What you might forget, though, is the cost of maintaining it, and that includes regular cleaning.
For those that hire a professional to help with tax matters, which is extremely useful for self-employed people, you can actually claim the cost of paying them as a deductible expense. Not only that, but the cost of travelling to and from their business premises is also deductible.
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