![]() ![]() In contrast, if you are a sole proprietor – that is, your business is not a separate legal entity from you – then you must report the income generated from trading on your personal income tax return. In South Africa, you can claim legitimate business expenses as tax deductions, regardless of whether you’re a sole proprietor or a company. Sole Proprietor Vs Company: Can Both Claim Business Expenses? Tax deductions can be carried forward for losses incurred in previous years in the same business. A tax-deductible business expense could be claimed if, for instance, you purchased equipment three months before opening your business. These expenses are business-related expenses that you incurred before you started your business. If you want to claim the expenses, you must show SARS that they were incurred in the course of business. Expenses include drinks, meals, live entertainment, venue rental, and the like. ![]() Entertainment ExpensesĪll expenses incurred while entertaining clients are tax-deductible. You can deduct the cost of education that you invest in yourself or your employees to operate your business as a business expense. Your business incurs capital expenses when buying major assets or services that will be used for a long time. It is a good idea to check with your tax advisor how much deduction you can take for your home office expenses. Housing costs or other mortgage expensesĭepending on the number of times you work from home and how much space you use for business, you may be able to claim a certain percentage.Expenses associated with marketing, advertising, and promotionĪdditionally, if you use your home for work, you may also deduct a portion of your home office expenses for work-related expenses.Fees (for example, bank fees) and utility costs.Fuel for business vehicles, including travel cost and transportation for business purposes.The rule of thumb is that in order to claim, they will have to have incurred expenses in direct relation to earning income. Phone costs – A salaried employee can also claim a tax deduction in respect to the depreciation of their personal devices e.g., laptops, cell phones, so long as they purchase and maintain them in their personal capacity for work purposes.Expenses related to business/office rental.Employee costs and administration expenses.Daily Expenses for Your Business.Īs part of your running your business, you will incur various financial expenses, such as: Listed below is a list of tax-deductible common business expenses that you may be able to claim to reduce your next tax bill. There are many tax-deductible business expenses that apply to most types of businesses. This would reduce the amount of tax you owe for that year. The taxable income of your business would therefore be R660,000 instead of R700,000. Suppose you earned R700,000 during the tax year and purchased goods worth R40,000. All purchases made for the purposes of running your business are considered to be business expenses.īusinesses that deduct their business expenses reduce the amount of taxes they have to pay. SARS defines tax-deductible business expenses as “expenses incurred in conducting a business”. Let’s review the basic definition of a tax-deductible business expense before looking at specific types of business tax deductions in South Africa. Who May Claim the SARS Disability Benefits? What Are SARS Tax-Deductible Business Expenses? Simplifying Business Expenses With Turnover Tax ![]() What Are SARS Tax-Deductible Business Expenses? In this article, we’ll cover everything you need to know about tax-deductible business expenses. What types of business expenses should you track in order to claim tax-deductible business expenses? ![]() Whether you’re set up as a company in South Africa, or a sole proprietor, every business-related expense could be tax-deductible. Taxes are one of the most important perks of being able to deduct legitimate business expenses through SARS registration, which lowers your taxable income. Send invoices, track time, manage payments, and more…from anywhere. Set clear expectations with clients and organize your plans for each projectĬlient management made easy, with client info all in one placeįreshBooks integrates with over 100 partners to help you simplify your workflows Organized and professional, helping you stand out and win new clients Track project status and collaborate with clients and team members Tax time and business health reports keep you informed and tax-time ready Reports and tools to track money in and out, so you know where you standĮasily log expenses and receipts to ensure your books are always tax-time ready Quick and easy online, recurring, and invoice-free payment optionsĪutomated, to accurately track time and easily log billable hours Wow clients with professional invoices that take seconds to create ![]()
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