Owning and operating your own business can have so many benefits. There are the main advantages such as freedom, autonomy and independence, but one of the best features are tax deductions. When deliberating whether you should or shouldn’t dive into the world of owning a business, consider the financial rewards that you will experience.
Think of your typical everyday expenses: fuel, car, phone and then think about the other expenses you might use in your personal (and business) life. An example might be insurance, registration and repairs and servicing, and as long as the vehicle is used for work-related purposes, they are all considered tax deductions.
Though if you find the notion of tax and tax deductions a little daunting, you aren’t alone. It is an area surrounded by confusion and sometimes terror, but it is actually quite simple.
The Australian Taxation Office (ATO) uses this formula to calculate your taxable income:
- Assessable income – tax deductions = taxable income
Basically, whatever you earn is taxed, but if you use your car, phone, have to buy plane tickets or pay for electricity for business purposes, those expenses can come off the income you are assessed to be taxed. Therefore you are taxed less overall, even though your income was perhaps a higher amount.
This is a great encouragement for those who are looking at undertaking a new franchise, because the financial anxiety can sometimes be staggering.
If you are unsure of what expenses can be claimed, it is recommended that you speak with your accountant. They can point you in the right direction, and ease your concerns come tax time.
But, if you are ready to take the plunge into owning your own business and enjoying the myriad of tax deductions, then enquire today with the team at The Franchise Society and lets discuss your options and Create Your Business together.