Some expenses which are general in nature requires correct recording in the Annual Tax Returm:
Home Office
If you are claiming home office expenses based on hourly rate which is 80c per hour, you can not claim separately phone, internet, and equipment. So the selection of method should be require a little planning based on where you can claim more deductions. Therefore, having a qualified accountant who can advise you what expenses you can claim can increase accuracy of annual tax return.
Legal Expenses
The nature or character of the legal expenses follows the advantage that is sought to be gained by incurring the expenses. If the advantage to be gained is of a capital nature, then the expenses incurred in gaining the advantage will also be of a capital nature. An expense incurred in establishing, replacing, or enlarging an income producing entity is capital in nature.
Entertainment
Generally, entertainment expenses are non-deductible for income tax purposes. The term “entertainment” is defined in income tax law (s32-5) and both GST and FBT leverages off this definition. The relevant legislation simply defines entertainment as meaning “entertainment by way of food, drink, or recreation. However, some specific entertainment expenses are deductible, for example the cost of meals provided on business travel overnight. Another example as per ATO guidelines is “providing refreshments to enable an employee to complete the working day in comfort is not generally entertainment”. That is, light refreshments are not often considered to be entertainment. Many confuse between entertainment and staff amenities, there are no issues with coffee and teas provided to employees because it is a norm, every now and then employers provide lunch to staff in house no problem with that. The meals and coffee etc. provided to employees at different sites especially travelling & working different states or regions that comes under travel allowance or meals & accommodation. “The two categories are quite different however, as staff amenities expenses are clearly defined as the cost of tea, coffee and biscuits etc. made available in the staff tearoom for the benefit of employees, while entertainment expenses are costs associated with client dinners and the like, especially those where alcohol is involved.” So as not to confuse these expenses it is advisable to allocate these expenses correctly, keep them separate one description is entertainment which is described in the legislation and the other depending on if workers or employer is providing coffee and cakes for morning and afternoon tea may be classed as staff amenities or expenses.
