Financial year end can sneak up on you very quickly and if you’re not prepared, it can cost you and your business thousands of dollars in tax.
Whether you like it or not, everyone has to deal with tax at least once a year and it can become a burden for many. However, if you’re prepared for tax time it can drastically change the way you see the next few weeks. If you’re a small business and eligible for the small business tax concessions, it can be an opportunity to invest back into the business to take advantage of the concessions available.
There are a number of areas you should look to address to ensure you’re prepared as we approach financial year end;
1. Prepare yourself – Do you know what your lodgement dates are? If you align yourself with a tax agent, do you know you get an extension on your lodgement dates? In some cases this can mean you have an additional 7 months to pay any tax.
2. Small Business Tax concessions – Know what concessions are available to your business and assess their appropriateness. Cash flow permitting; now is a great time to review your IT infrastructure or that need for a new motor vehicle for your business. The most popular concession available to small businesses is the instant asset write off. As a small business you can spend up to $20k on a new asset and claim an immediate tax deduction.
3. Bad debts – When did you last review your debtors ledger? Do you have aged debtors that are unresponsive and not worth chasing? In order to claim an income tax deduction for any bad debts these should be physically written off in the year you wish to claim on them, so it’s an important consideration between now and 30 June.
4. Donations – Feeling charitable and been putting off making that donation? A donation made to a Deductible Gift Recipient prior to 30 June will be deductible against your income and therefore reduce the amount of tax you pay.
5. Superannuation – As a sole trader you may want to think about making a personal superannuation contribution. There are certain conditions that must be met and these are found here. This deduction will offset the income you’ve earned during the financial year.
Don’t make tax time a chore; you can very quickly assess these key areas raised. No one enjoys getting a large tax bill (despite it meaning you’re making money) and by addressing the above you are ensuring you’re in the best position as we approach year end.
Getting the right advice
These recommendations are just the tip of the iceberg but they highlight the sorts of questions you need to be asking yourself. Contact the Dexterous team TODAY to find out what concessions you may be entitled to and let us take the stress out of tax time so you can concentrate on growing your business.
Telephone: 1300 996 928