Everything Everywhere All in One Place
Thriday: Everything Everywhere All in One Place
Hi Thriday-ers. Jaala here - Community Manager and self-proclaimed film critic.
I recently saw Everything Everywhere All At Once at the cinemas and felt it would be remiss of me to not critique the film's major themes: non-deductible expenses and receipt management. 😉 On a serious note, the film is great; a must-see!
The absurdist comedy-drama follows the story of Evelyn Quan Wang, a Chinese-American woman who runs a struggling laundromat with her husband, Waymond. The film opens with an all-too-familial scene of the small business owner surrounded in mountain on unreconciled receipts.
Theme 1: Receipt Management
One of the biggest causes of stress for SMEs come tax time is tracking receipts for a BAS submission.
To make sure you have crossed all your t's and dotted your i's, we've broken down 3 simple rules to follow when managing your receipts. This information comes straight from the horse's mouth (the ATO).
Rule No. 1:
Receipts you need to keep include:
- Equipment or asset purchases and sales
- Expense claims and repairs
Rule No. 2:
A receipt must show the:
- Name of the supplier
- Amount of the expense
- Nature of the goods or services
- Date the expense was paid and
- Date of the document
Rule No. 3:
You need to keep these receipts for five years from when you lodge your tax return, in case the ATO ask you to substantiate your claims.
Don't no one want to be in that situation. Everyone repeat with me: Clean accounting, clean mind.Clean accounting, clean mind...
Note: If you are claiming the cost of a depreciating asset you have used for work, such as a laptop, you must also keep records for five years following your final claim. This includes either:
- Purchase receipts and a depreciation schedule or
- Details of how you calculated your claim for decline in value
Don't forget: Your documents must be in English unless you incurred the expense outside Australia.
With Thriday, you can scan receipts and our smart technology will match those receipts to the expense transaction. This makes it easy when it comes to tax time to have all your receipts reconciled!
Pity Evelyn and Waymond didn't have a Thriday account to avoid the scaries:
Theme 2: Non-deductible expenses
In the film, the protagonist Evelyn attempts to claim the expense of a karaoke machine when they own a laundromat (bless her for trying!).
To avoid the tax auditor peering at you with disgust, like Jamie Lee Curtis does terrifyingly well, read on.
Non-deductible expenses are expenses that the ATO will not allow to be tax deductible. These are expenses that can’t be used to reduce your taxable income in any way.This is because the money put towards these expenses was not in the furtherance of earning work-related income, or is specifically excluded by the ATO.
Examples of expenses that can’t be claimed:
- Expenses incurred that are not relevant to earning assessable income
- Private or domestic expenses
- Capital expenses or of a capital nature – at the moment you can (instant asset write off) – or need advice from Tax Agent
- Expenses specified under income tax law as non-deductible
More specifically, these may include but are not limited to expenses such as:
- General house hold item costs (coffee, tea, milk etc.)
- Expenses that you have reimbursed on (where you don’t incur any expense)
- Fines and penalties
- Client entertainment expenses (meals, parties, concert tickets)
- Gifts unrelated to generating earnings
- GST attributable to expenses
- Personal use of business items
Disclaimer – whilst these expenses generally aren’t deductible there can be situations where they can be claimed, contact Tax Agent in regard to your relevant circumstances. If you have claimed an expense which is not deductible you may be liable to penalties and interest payable to the ATO.
To get clear on what you can claim as a business deductions, visit the ATO: https://www.ato.gov.au/Business/Income-and-deductions-for-business/Deductions/.
Thriday has created a platform that combines business transaction accounts, quoting, invoicing, bookkeeping, accounting, and tax, all in one place, to help small businesses automate their financial admin, save a massive amount of time and thrive in what they love doing.
Thriday: Everything Everywhere All In One Place!
Before we go to market, with the above tips that emerged from the film's central themes, you will be able to step into your empowered self and take on tax time like a superhero this financial year.