Top 10 tax tips
Take the strain out of the end of the financial year!
It’s that time of the year again where the tax man comes knocking and expects you to have all your financials in tip-top condition. Small business owners can often feel the strain as the end of the tax year looms, desperately striving to digest and implement a wealth of information.
Our top 10 list of tips is a great guide for how you can do your own tax properly:
- Be organised – don’t leave everything to the last minute. Research what it is that you need to have ready and start collating all documents well in advance of the tax deadline. We suggest writing a list of all the files that need to be gathered. Remember to include receipts, certificates, bills and dividend statements.
- Write off bad debt – It is always best to review all debts before 30th June and write off bad debt. This involves taking the value of the debt owed and eschewing taxes against it.
- Scrap unwanted stock – Look for obsolete stock and adopt a valuation rule. Scrap unwanted stock by 30th June, if the difference between opening and closing value is less than $5,000.
- Entrepreneurs tax offset – If you as a taxpayer are a small business entity of less than $75,000 then you may qualify for an offset of up to 25% off tax payable on business income.
- Review your rebates - Tax rebates, such as the private health insurance rebate, reduces the tax you owe and may be offered as an incentive, as a credit for tax already paid, or to relieve personal circumstances.
- Employ car deductions - If you use your car for work, keep a logbook and keep all your expenses for the year. It will allow you the option of selecting the best method of claiming the cost of running your vehicle.
- Goods and services tax (GST) – GST can be a bonus for small business owners in terms of cash flow. If for example your collection cycle is less than 30 days, the GST money provided from your customers will be in your bank and can be deployed in the funding of your business.
- Get educated- Understand what work related expenses you can claim, and those that are unique to your industry.
- Expenses - Pay deductible expenses as close to June 30th as possible to minimise the cash flow impact and make sure you keep a well-organised file of all receipts.
- 10. Web based accounting – shoebox accounting is not only unreliable but also unsafe. With the digital age well and truly upon us, it is only logical to move accounting to a secure online platform, where financials can be tracked and maintained with ease.
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