Soon, we'll be at the end of another financial year. There's a few myths I'm hearing that seem to crop up every year.
Here are a few things small business owners should relegate to the realm of April Fool's Day.
Myth 1: Buying a car will reduce my tax bill. Sounds good, right? But buying that new shiny vehicle is not the answer to reducing your tax bill.
You will only get one month of depreciation on the vehicle and perhaps not even a lease payment deduction if the first payment is due in April. What this purchase may do is commit you to servicing a debt you don't actually need. If you notice that your vehicle running and maintenance expenses are high, investigate your options for cost savings — but if you don't really need it then think twice about this purchase.
Myth 2: If I buy items or assets that are $500 or under, then they can automatically be written off. This is a popular one for businesses replacing gear at year-end.