Top Tips for Maximising Your Business Expense Claims in NZ

When it’s time to file your taxes for your business, you can claim business expenses to ease your tax obligations and save money. You must handle your taxes efficiently to avoid making mistakes, so balancing compliance and money-saving expenses can be challenging for New Zealand business owners.

How To Optimise Your Business Expenses On Your Taxes

First, what are business expenses? These are the costs that you face when running your business Most business people have day-to-day costs when managing their operations, like advertising, purchasing inventory, buying assets, etc. Some assets, usually ones that cost $1000 or more, must be depreciated before they’re claimed. 

When it’s time to pay your taxes, your total profit is your taxable income, and you can subtract your business expenses from them. The more business expenses you have, the less profit you’ll have to pay taxes on. 

What can you do to maximise your business expense claims?

Seek Professional Help From Financial Specialists. Taxes can already be confusing, even without business expenses. Work with a reliable financial specialist who can provide you with expert personalised assistance. Search for a small business accountant who has plenty of experience with business expenses and companies like yours. 

Be honest with your financial specialist so they can provide you with accurate answers and personalised support. Work with them to discover what you can claim and what you can’t count as business expenses. 

Your financial professional will support you throughout the process, from discovering what you can claim to filing your taxes.

Keep Organised Records. Always keep thorough, organised records to avoid confusion down the track. A professional bookkeeper can help record day-to-day transactions, whereas an accountant can assist with looking at your finances as a whole. 

Thorough records will ensure that everything you have makes sense. For example, if you log an invoice for a transaction with a customer, then write down what they purchased, when it was bought and how much they paid. This way, you won’t have to rely on memory. 

Make sure your records are neatly organised and in a secure place. Advanced financial software will make it easy to access your information whenever you need to. Organised records simplify the process of finding specific documents, so you won’t have to stress about searching through receipts for a specific document. 

Understand What You Can Claim. What can you claim? You might accidentally overlook certain expenses, meaning you’ll miss out on an opportunity to reduce the amount you have to pay taxes on. 

Common business expenses include:

• Office Expenses. Consider rent for your commercial space, your utility bills and your office supplies. 
• Vehicle Costs. Do you have a company vehicle? Factor in maintenance costs, fuel expenses and insurance. 
• Travel Fees. If you travel for your job, then remember flight ticket costs and accomodation fees. 
• Professional Services. Accounting services, legal fees and business coaching costs can be logged as business expenses. 
• Marketing. How much do you spend on advertising your business? Website costs, social media ads and more can count as business expenses.

Differentiate Between Personal Expenses And Business Expenses. It’s extremely important to know the difference between your personal and business expenses:

• Personal Expenses. Anything you pay for for your life outside of your business.
• Business Expenses. Anything you pay for that directly ties into your business.

For example, while you can claim the cost it takes to maintain your company vehicle, you can’t do so for your personal vehicle because it’s used for personal matters and not your company.

Differentiating between your personal and business expenses can be tricky if you use some things for your personal life and your company. For example, if you use your vehicle for personal and business trips, how can you claim its expenses? There are ways to determine the percentage of personal-to-business use, and you’ll need to record your usage accurately to avoid mistakes on your taxes.

For your vehicle use, you can keep a logbook to figure out how much you use your vehicle for your company and how much you use it out of work.

You can also do this for your mobile phone, home office, etc.

File Your Taxes Correctly And On Time. Mistakes on your taxes, including incorrect information and missing important deadlines, can lead to costly fines and interest charges. Work with your accountant to file your taxes correctly and on time, maximising your returns so you have more money for your company. 

Making The Most Of Your Business Expenses In NZ

Contact us at Business Like today if you’re interested in maximising your expense claims. Not only that, we also offer our clients professional accounting services, business training courses and much more.

Ready to get started? Call us on 09 262 0726 or send us a message online.

Business Like: Let’s discover the best way to manage your business finances.