Dealing with your taxes every year can be a serious headache. There are some many different rules and regulations to think about, that the information and the numbers can quickly haze together into a stream of frustrating nonsense. This is one of the many reasons why bookkeepers are such an effective solution for small businesses, as they navigate the rules on the behalf of their clients, helping them to maximize their deductions, and avoid unwanted trouble.
Since no-one enjoys paying a huge amount in taxes, tax professionals have the daunting task of searching through thousands of claimable items to find ones that could be considered reasonable for the companies they work with. While some of these claims are completely legitimate, others can become absurd – particularly when small business owners try to do their accounting without a bookkeeper, and start to mix business and personal expenses. Following we have listed just some of the most ridiculous deductions that businesses have tried to make recently.
1. Personal Care Payments
While there are a lot of different things that can be written up as a business expense by an experienced bookkeeper who knows what they’re doing. One of the most common write-off attempts in the last year was for personal care matters such as manicures, massages, clothing, and even plastic surgery! While it’s important to look good for meeting a client, your beauty routines should be paid for out of your own personal account.
2. Getting Married
While marriage can feel like a huge investment, it’s not actually something that you can reasonably write off as a business expense. Yet, a lot of the accountants that Xero surveyed in the last year mentioned that their clients had been trying to get a refund for their wedding.
3. Home Improvements
Making some changes to a spare room so that you can create a home-office for out-of-hours work might seem like a reasonable business expense. However, home improvements such as hot tubs, game rooms, and movie rooms can’t really be counted as something that is essential to the growth of your company. A third of accountants surveyed found that these ridiculous home improvements were being claimed for by small businesses last year.
Running a business can be a stressful experience for anyone involved. After all, there’s so much to think about when it comes to finances, growth, and marketing – it’s no wonder that many small business owners find themselves in need of a vacation. Unfortunately, nearly half of the accountants surveyed by Xero found that their clients had attempted to pay for that vacation with their business money – and claim it as a tax write-off.
5. Extravagant Outings
They say that you should spend your life searching for incredible experiences that will keep you entertained with fond memories when you are old and grey. Unfortunately, extravagant adventures such as boat rides, helicopter journeys, and spa trips don’t count as something that you can write off as a business expense – despite attempts by numerous companies last year.
6. Too Tired to Cook
We’ve all been there – a rough day of running a business can leave you absolutely exhausted, and ready to collapse on the sofa the moment you get home. However, while meals on business trips are generally a quite common deduction, attempts to claim restaurant visits for the times you were too tired from working to cook your own meal are likely to be shunned.
7. Doggy Daycare
Nearly thirty percent of all the accountants surveyed listed pet insurance, pet daycare, food, and grooming as an attempted write-off by clients in the last year. We know that looking after your pooch is important, but once again it’s something that should come out of your personal finances!
8. Children Gifts and Child Support
Finally, some people tried to make looking after their children easier by using business money to pay for tuition in schools, gifts, new clothes, baby sitters, and even child support in some cases.
The Complications of Taxes
Without the help of a bookkeeper, it can be difficult to determine which of your expenses can be wrote off when tax season rolls around, and which you’ll have to face. Keeping clean detailed records and ensuring that you have the help of an experienced professional can improve your take-home income and allow you to avoid getting into trouble for some of the absurd claims outlined above.
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