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How to Maximise Your Business Tax Deductions This EOFY

How to Maximise Your Business Tax Deductions This EOFY

EOFY is coming around fast, so if you’re looking to save a little bit more in the next financial year, now is a great time to review what you might need to purchase (or top up on) when it comes to office supplies. Getting everything you need before the 30th of June deadline can increase your tax return, so let’s have a look at the kind of things you can claim and what we recommend looking at if you’re revising what your office needs for the coming year. 

In this blog, we’ll provide you with some helpful tips and points to consider when it comes to purchasing and claiming tax-deductible items for your business. So, let’s jump in!

Understanding What Your Business Can Claim

The first essential step, of course, is to know what your business can claim come tax time. Two key factors to keep in mind are capital equipment and operating expenses. 

Capital Equipment vs Operating Expenses

No matter the nature of your business, chances are there are several big-ticket items you’ll need to purchase every few years that are fundamental to operations over the long term. These are items that your business will actively use for some time as part of your ongoing operations. Common examples of capital equipment include:

Capital equipment includes all the kinds of equipment that you’ll be using for prolonged periods, it can be claimed as an expense across several years based on the diminishing value method (this leads to higher deductions in the initial years of the equipment’s life and lower deductions later on). 

There’s also a prime cost method, in which the deductible value of the capital equipment is the same each year. This would lead to lower deductions in the initial years, but more stable deductions later on.

Along with capital equipment, there are also your ongoing operating expenses, which can also be claimed. These include your day-to-day running costs like rent, utilities, office stationery, salaries, etc. Many of these can often be claimed in full for the relevant financial year.

Don't forget about instant asset write-offs. These are permitted by the ATO in certain cases, whereby the full cost of assets can be instantly written off in the same financial year. In other words, you’d get the full deductible amount in one lump sum rather than having to split it across several years. You can learn about your eligibility on the ATO website.

Claiming Office Furniture and Tech

A lot of office furniture and technology (computers, printers, projectors, etc.) can qualify as capital equipment or a general tax-deductible item. If your small business is expanding, or you’ve been thinking about upgrading older tech for a while, now is a great time to do it.

If you’re not sure where to start, we recommend having a look at your budget to start off with. Check how much you have left to use up before the end of the financial year and whether that budget leftover can cover any of those office wishlist purchases. Another benefit of shopping for your office at this time of year is that there are often bigger deals with some great savings - equally, you can look at bulk-buy options that often come with a discount. 

High-Impact EOFY Purchases to Consider

Office Upgrades and Fit-Outs

Along with furniture and tech, certain office upgrades can also be deductible. This could include renovations, new fit-outs, extensions, etc. If this is something you’ve been considering and you want to maximise your tax return for this year, it’s important to remember that they need to be complete before the end of the financial year on June 30th. These are often referred to as capital works, and you can claim a percentage of their cost each year for up to 40 years, meaning that if you have the budget for them, they’re a great long-term investment. 

The general items you might also purchase to complement an office upgrade (such as furniture, tech, appliances, etc.) will typically, once again, either be individually tax-deductible or qualify as capital equipment that can be claimed over several years. Remember to always speak with your tax accountant or financial advisor with comprehensive knowledge of Australian tax requirements to ensure that what you’re seeking to claim qualifies.

Equipment to Boost Productivity

Equipment that makes your business more efficient is always worth considering - and it’s another addition to your space that’s tax-deductible. While this can include general tech and furniture, it also includes everything from POS systems, upgraded computers, and kitchen equipment, to core stationery, software and subscriptions.

If you need to scale up the amount of this equipment you have, the end of the financial year (EOFY) is the ideal time to do it. As more business essentials will be on sale, you’ll have a great chance to get what you need while staying within budget for the year.

Don’t Forget These Commonly Missed Deductions

Cleaning and Janitorial Supplies

Something that’s often an afterthought (but is just as essential to running an office), but is another tax-deductible purchase, is anything cleaning and hygiene-related. This goes beyond the cleaning supplies you might get for the office and expands to include cleaning services you’ve paid for throughout the year. 

Software and Subscriptions

Finally, one major purchase that’s essential for plenty of offices and businesses is the must-have software packs or subscription services your business uses. This can include programs such as Adobe Creative Cloud, Microsoft 365, CRM platforms like Salesforce, or project and task managers such as Asana or Monday.

If you engage any cloud-based security services, including for off-site data backups, these can be claimed as part of operational costs, as well.

In the lead-up to EOFY, you can restock all your tax-deductible essentials here at Office Choice. From furniture and office tech to all your stationery, office kitchen and first aid needs, we’ve got you covered. If you have any questions, don’t hesitate to get in touch with your local Office Choice store.