While most people would assume we’re pedal to the metal for tax time, it’s pretty much business as usual. We’ve been discussing tax planning with our clients over the past 12 months. Sure, we’ll give them a gentle reminder to pay super contributions before 30 June, including any additional super contributions for the year, but really, it’s just like any other quarter.
June 30 is still a great time of year to look for ways to save money on tax and start planning for growth and future success. Check out our ten tips to help your small business prepare for tax time.
1. Be prepared
Get on top of your paperwork early to minimise the hassle and guarantee that you’ll get the most out of your tax return. Keeping on top of your accounts and records right throughout the year is the best plan of attack, ensuring all your accounts are reconciled and everything is where it should be. This can take a lot of stress out of tax time and ensure that all of your reporting is entirely accurate.
2. Review current systems
Now is the perfect time to adopt new systems and processes. Using the right system for time-sheeting, POS receipts and invoicing can not only save you time but bucket loads of money in the long run.
3. Check level of cover
Insurance cover is a vital consideration for all businesses, and the end of a financial year is the ideal time to review the insurance cover you have in place. Do you have an adequate level of cover or are there risks which you are not protected against? Could you be saving money on insurance by switching providers or by bundling two or more policies together?
4. Consider your business structure
Whether you’re forecasting growth or substantial changes for the new financial year, you will need to reassess your business structure. Different business structures have different tax responsibilities, so weigh up the different options and decide what business structure is right for your situation.
5. Find out what tax deductions you can claim
The tax deductions available for your small business can change every year. There are many expenses you pay to keep your business running or help you earn business income, most of which are typically tax deductible. Being across the latest deductions available can be an easy way to reduce your tax liability.
6. Capital gains tax (CGT) concessions
You may be eligible for a range of CGT concessions, which can provide substantial tax savings. These concessions will be available if you have disposed of active assets in the current financial year, or you are looking to dispose of an active asset. To be eligible for the CGT concessions, your business must qualify as a small business entity or have net assets of $6 million or less.
7. Change your pay as you go (PAYG) instalments
Small business owners should review their PAYG instalments and notify the Australian Taxation Office (ATO) if the expected profit for this financial year is lower or higher than previous years, so instalments can be adjusted accordingly.
8. Protect against risks
Now is the time to get all of your business’ insurance requirements in order and review the policies you have in place. Take the time to work out your company’s projected wages and salaries for the financial year ahead. If there are any problematic exclusions in your workers’ compensation cover, see if you are protected against these risks in any other way.
9. Be wary of tax refund scams
Cyber criminals will often go to great lengths to convince you that their offer or request is genuine. It’s important you remain aware of typical scams and malware and know what to do if you’re targeted. How to identify cyber threats to your business.
10. Backup and secure your files
It’s hard to predict what will happen in the future, but you can make changes now to help protect your business. Backup and store your registration, financial and customer data, and other important business documents in a secure off-site location.
For further information on how to maximise tax benefits for your business, talk to us.
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