Managing the financial health of your salon while continually delivering 5-star experiences is challenging between clients, staff, inventory and upkeep. But don’t let potential tax savings slip through the cracks that could free up cash flow.
Strategically revisit these six areas where overlooked deductions may apply to your salon’s situation.
1. Instant Asset Write-Offs
Need new equipment like salon chairs, towel steamers or wash stations? Purchasing by June 30, 2023 could qualify for temporary full expensing rules, accelerating deductions.
Just ensure items are used for business purposes and meet eligibility criteria within required timeframes. And remember, claiming now reduces assets to offset later.
2. Depreciation of Existing Assets
Your current furniture, tools and electronics lose value over time. Deduct annual wear and tear by categorising these items and calculating eligible declining values.
Review asset registers carefully to capture everything deductible. Precision here optimises legitimate salon expense claims.
3. Prepay Expenses
Paying future bills early like insurance premiums, advertising slots or software subscriptions accelerates potential deductions to this tax year.
Just weigh cash flow tradeoffs in FY2024 if less expenses remain to offset income without sufficient lead time.
4. Loan & Credit Costs
Tally up interest and fees from business cards, lines of credit, terms loans and other financing to chip away at taxable margin.
5. Staff Education & Training
The skills refreshers and courses keeping your team exceptional at client care may also trim tax liabilities.
Keep robust records of curriculum, qualifications obtained and costs for ironclad deduction claims.
6. Dedicating Home Office Space
Tracking home workspace costs like cleaning, lighting and occupancy needs substantiating to convert portions of deductions. Calculate hourly usage rates carefully.
And Don’t Forget...
Product costs, advertising, lease payments, motoring, uniforms, insurances, accounting fees - substantiated expenses add up. The key is staying vigilant year-round to capture proof of legitimate business costs.
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