HomeHome SearchSearch MenuMenu Our productsOur products

Answer these six questions to see if you can get a deduction of expenditure and losses

by , 14 June 2016
Answer these six questions to see if you can get a deduction of expenditure and lossesA deduction is an amount SARS lets you deduct from your taxable income, and it's very often the actual expense you've incurred. You can use the full amount of your deduction to reduce your taxable income in the year you incur it, or you can do so over the year it applies to.

That's all good and well, but the real question is: 'How do you know if you can deduct an expense?'

The general answer is that you can only deduct an expenditure or loss you incur in your company's production if it's not of a capital nature.

But there's more to it! So to help you know if you qualify, simply answer the following six questions...

Keep reading to see what they are...

*****ADVERTISEMENT*****
 
There's nothing better than getting money back from SARS...
 
But do you know whether you can claim for:  
The cost of new laptops for your business?
5% of building costs?
Stolen assets?
Gifts you give your clients to say thank you for their business?
 
************************
 

Answer these six questions to see if you can get a deduction of expenditure and losses              


QUESTION#1:

Do you carry on a trade?

QUESTION#2:

Do you derive income from that trade? Or can you show that you will in the future?

QUESTION#3:

Is the amount claimed an expense or loss?

QUESTION#4:

Did you incur the expense or loss in the year of assessment?

QUESTION#5:

Did you incur the expense of loss in the production of income?

QUESTION#6:

Did you set out the expense or loss for the purpose of trade?
 

*If you can answer 'YES' to all six questions, then you're on the right track to qualifying for a deduction of expenditure and losses.

BONUS TIP: In order to qualify, the expenditure or loss mustn't be prohibited by Section 23 of the Income Tax Act.

To learn more on this, page over to Chapter D 06: Section 23(m) in your Practical Tax Loose Leaf Service handbook, or click here to order your copy today. In it you'll learn exactly:

·         What section 23(m) is;
·         Who's affected by it;
·         What it prohibits you from doing; etc.

So what are you waiting for? Click here to get your copy today. 


Related articles




Related articles



Related Products



Comments
0 comments


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>