![]() Now that you know whether or not you have to pay tax, lets delve into the different things you can claim back for, if you fall into the bracket of people that have to pay tax. Take a look at the table below to see how much you can earn, before having to pay tax. Now that we know whether or not you fall into the category of Employee, let’s talk about how much moola you can earn before having to pay taxes! If you’re self-employed and running your own business, or working as a “freelancer” or independent contractor, then your earnings are not classified as remuneration and therefore you are not an employee. Remuneration will include: salary, fee, bonus, wage, gratuity, pension, leave encashment, emolument, voluntary award, commission, annuity, stipend, overtime, superannuation allowance, retirement allowance, lump sum benefit payment, director's remuneration, etc. ![]() fringe benefit) and whether or not for services rendered. Remuneration is any amount of income which is paid/payable to any person whether in cash or other ways (e.g. ![]() GREAT! So, what is the meaning of remuneration, for tax purposes? Generally, they will work full time for one employer and have no other jobs. If this sounds confusing, that’s because it is. That’s why most people decide to use the standard mileage method.This may seem like a simple concept, but let’s make sure that we’re all on the same page as to who and what an employee is! An employee is any person (other than a company) who is paid by an employer for work performed. On top of that, once you use the actual costs method, you will not be allowed to use the standard mileage rate for any following year. Should you decide to claim depreciation, the vehicle will also have to meet weight and type requirements. There are other things to keep in mind when using the actual expenses method. If you used the aforementioned car for business 60% of the time, then you can only deduct 60% of $2,857, or $1,714. Keep in mind, however, that you can only deduct the business-related portion of the depreciation expense. If you depreciate a $20,000 car over seven years (the maximum number of years allowed), that’s $20,000 / 7 = $2,857 per year depreciation expense. There are many ways calculate an asset’s depreciation, but the easiest way -is by using the “straight-line method.” This is the total cost divided by the number of years (maximum of seven years from the point the car has been put into service). Since it provides you value for the entire time you own it, you must manually account for that value over time. You realize that your car won’t provide all its value in the first year, because you plan to own it for more than a year. You buy a $20,000 car (congratulations!). Here’s an example of how you figure out depreciation for a $10,000 vehicle: Other actual costs, such as depreciation, can become quite complicated. ![]() Some expenses, such as gas and maintenance, are relatively easy to track as long as you hold on to your receipts. You can do this manually with pens and papers, or automatically track and categorize expenses with accounting software like QuickBooks. This includes gasoline, insurance, maintenance, depreciation, lease payments and more.Ĭlaiming actual costs requires solid record keeping and holding onto receipts. The actual cost method entails deducting each and every business-related car expense by itself.
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