As small business owners, we all know how important it is to keep costs low while maximizing profits. One significant way you can do this is by taking advantage of the 90 test concession available to small businesses. By reducing your taxable profits, you can pay less tax and reinvest more money back into your business. Here are some tips and tricks to help you maximize the benefits of this concession.
Understand what qualifies for 90 test concessions
Before you start leveraging the 90 test concession, it’s essential to understand what qualifies as eligible expenditure, such as capital allowances, research and development, and charity donations. By having a clear understanding of this, you can ensure that you are claiming everything you are entitled to, resulting in a significant reduction in your taxable profits.
Keep accurate records
To claim the 90 test concession, you need to keep accurate records of your business expenses and ensure that they are deductible expenses. Proper record-keeping will help you maximise the amount of eligible expenditure you claim and also make tax time much less stressful.
Plan your expenses ahead of time
Planning your expenses ahead of time can help you make the most of the concession. This way, you can ensure that you have budgeted for all your eligible expenditure, maximize your claim and minimize your taxable income. Planning also enables you to identify any areas where you might be overspending and helps you to adjust your budget accordingly.
Consider the impact on your cash flow
While the 90 test concession can be a great way to save your small business money, you need to consider the impact on your cash flow. If you spend a lot of money in one year, you may be able to claim that expense over several years, reducing your taxable profits. This can impact your cash flow as you may not receive the full tax relief immediately.
Consult with your accountant
As always, it’s critical to seek professional advice from your accountant to ensure that you maximize the benefits and avoid making any costly mistakes. They can guide you through the process and help you to identify all the eligible expenses you can claim.
In conclusion, the 90 test concession is an excellent way for small businesses to reduce their taxable profits and maximize their profits. By considering these tips and tricks and working closely with your accountant, you can ensure that you are claiming everything you are entitled to and making the most of this valuable concession.
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