The taxpayers are already in a rush to file their 2019 income tax returns on time, to avoid any action by the Australian Taxation Office (ATO). In such a situation, they must be either consulting taxation agents, or gaining knowledge from ATO website www.ato.gov.au

In 2019, Australian Taxation Office (ATO) has given provisions for writing off almost all business expenses. In a way, ATO has made sure that all those expenses that are consumed within the framework of a business, of any legal nature, are eligible for deductions while filing the income tax return in 2019.

In that case, let’s quote this in simple words; if you haven’t spent any money which is in direct nature, for the business in 2019, it will not guarantee an eligibility in tax deduction.

However, in spite of business expenses incurred for the direct or indirect benefit of the business, the ATO doesn’t recognizes all of them as potential business contributors, and therefore doesn’t view them as business expenses. Here’s an exhaustive list of some of those business expenses that you can’t write-off in your income tax return of 2019:

1. FINES AND PENALTIES

Have you been imposed with fine or penalties by ATO in the previous year, or the current year? If yes, then unfortunately you can’t claim any of those expenses as write-offs or deductions in your income tax return in 2019. The most common fines and penalties include late payment of taxes or missing the due date for income tax return filing with the ATO.

2. BUSINESS MEMBERSHIP DUES

As a businessman, people often take up memberships of the clubs (like fitness club, travel club, country club, etc.) or various communities. However, even though you might take them for building business contacts or business networking, they aren’t recognized by ATO as an eligible tax write-off in income tax return in 2019.

3. POLITICAL CONTRIBUTIONS

If you have made any political contributions, including those made for political campaigns, political set-up, road shows, etc., you as a businessman aren’t eligible for tax deductions on such expenses. Although, that doesn’t refrain you from not contributing to charitable trusts or organizations.

4. NON-UNIFORMS WEARING OUTSIDE OF WORK

Heading out for an important business meeting in your 2-piece or 3-piece suit? You can’t claim write-off to such outfits. ATO allows write-offs only on the uniforms that are worn inside the office, and only for work purpose.

5. SOLE PROPRIETOR’S SALARY

As a sole proprietor, if you are employed on a salary basis, you can’t claim deductions of it as a business expense. This is because, in the sole proprietorship, the businessman and an outsider are just one person physically. Therefore the number of expenses available for tax write-offs for a sole proprietorship business becomes limited too.

6. BUSINESS EXPENSES FROM INCOME OUTSIDE BUSINESS

If you bear an eligible business expense from the amount earner from other sources than business, you won’t be eligible for deduction. For example; If you have incurred business telephone bills from the money you earned from your side business of photography, you can’t claim write-off to them.

7. CAPITAL EXPENSES

Capital expenses are eligible for depreciation and are large in figures, therefore not the entire chunk of it will be deducted. However, the depreciation charged will be allowed for deductions.

Capital expenses are borne for purchase of long-term assets like vehicle or machinery. However there are some provisions for providing write-offs for some of these expenses.

8. ILLEGAL COSTS

You may be already knowing this, but know it LOUD AND CLEAR. If you are involved in money-related illegal activities like money laundering, there are highest chances that ATO will run behind to screw your life. In that case, since this is an offense, ATO will charge huge penalties, of which you can’t ask write-off for.

9. ENTERTAINMENT EXPENSES

Are you thinkingto take your office staff on a holiday? Or are you providing them some form of entertainment? You can definitely do so. But also know that the ATO won’t allow you to ask for a deduction on such expenses, even if it’s for business leisure purpose. However, make a note that business meals (including one while travelling) are completely eligible for deductions.

10. EXPLORATORY COSTS

If you are planning to expand your business, the ATO definitely allows you to do so. But they don’t account to be written-off from the taxable income. However, if the purpose of exploring new business opportunities is solved and if you actually execute them and make it your business, you can later write-off such exploratory costs.

Tax planning may not be easy, but it definitely goes a long way, if implemented accurately. Basic rules, if followed time-to-time, will help taxpayers focus on other potential areas of tax liability reduction and will give more room for expansion opportunities.

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