The end of financial year can be a busy time, so getting organised can make for a smarter year for your business. With tax time around the corner, the Australian Taxation Office (ATO) will be gearing up to process an enormous amount of tax returns.
Even if you have always had a successful tax return, sometimes, lodgements may go through with minor errors. To maximise deductions, here are four ways to ease the completion of your tax lodgement.
Here are some crucial tasks to add to your end of financial year to-do list. →
Up-to-date record keeping to ensure compliance
It is crucial to consistently be keeping a record of all expenditure and profits within your small business. For example, making sure your supply payments are accounted for. This process is a safeguard for potential audit trails. Other record keeping habits can include;
- A profit and loss statement (inclusion of profit and losses)
- Completing a stocktake
- Lodging your income tax return
- Lodging yearly reports/ returns
An example of a programme that can assist in this area is ‘cloud based accounting’ such as Xero. Programmes like such can provide real time reporting, helping to track how your business is performing and also assists in completing your end of year financials, making your tax return easier.
Find out what tax deductions you can specifically claim
you may be able to claim if your business has the following;
- Work related Car expenses (e.g. fuel as a travel expense)
- A website
- Based at home (e.g. computer, phones or other electronic devices)
- Travel expenses
- Machinery/tool expenses
Still unsure about what you can claim on tax? Read more here about what you can claim on tax .
Be sure to use a registered tax agent
It is important to ensure your tax agent is registered with the tax practitioners board. Otherwise, there can be no protection afforded to taxpayers who use unregistered tax agents if something were to go wrong.
Importantly, accountants who understand your business industry you operate in are helpful as they have the skill set and knowledge to be able to help you grow your business.
Speak to your accountant about recent tax changes to maximise your return.
Crucially, it is important to discuss current year tax changes with your accountant so you can maximise your deductions and be compliant with the current year’s tax process. For example, introduced this year for small businesses is the instant asset write off for purchases under $20k.
So there you have it. The above tips are just a few of the many that you may familiarise yourself with to avoid a tax headache. All in all your safest bet is to talk to your accountant to know exactly where your small business stands tax wise.
Still unsure? Take a look at LawPaths article on the tax agent services act 2009 to understand what services tax agents are required to provide to their clients.
Unsure where to start? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-price quote from one our network of 600+ expert lawyers or any other legal needs.