As the tax year comes to a close, it’s an important time to consider strategies to reduce your tax. Hopscotch Accounting has prepared a list of tax tips that may apply to you or your business.
- Get Your Paperwork Up to Date
Maintaining essential documentation is crucial for streamlining the end-of-financial-year (EOFY) process. Here are a few examples of the records you should ensure are in place:
- Sales and business purchase receipts: It’s important to keep track of receipts for both sales made and purchases related to your business.
- Records of tax returns: Maintain a record of all filed tax returns to facilitate the EOFY process. These documents help provide a clear overview of your financial obligations.
- Business Activity Statements (BAS): Keep copies of your BAS filings, as they detail your business’s tax obligations, including goods and services tax (GST).
- GST returns: Ensure you have records of your GST returns, which demonstrate your compliance with the tax regulations related to the GST.
- Employee superannuation contributions: Keep records of contributions made to your employees’ superannuation funds. This helps ensure compliance with superannuation requirements and facilitates accurate reporting.
By organising and preserving this important paperwork, you can streamline the EOFY process and ensure a smooth transition into the new financial year.
- Simplifying accounting with online tools
Simplifying your tax obligations can be achieved by maintaining a clear distinction between your personal and business banking activities. This separation serves multiple purposes: it allows you to consolidate all your business expenses in one location, reducing the chances of mistakenly claiming personal purchases as business expenses. Additionally, having a dedicated business bank account facilitates effective cash flow management.
If you utilise online banking services, you may have access to valuable tools that can assist you in day-to-day bookkeeping and gathering relevant information for your tax return.
- Manage your Deductions
Maximising your eligible deductions for business expenses is a prudent decision, and it’s crucial to understand what expenses you can claim. As a business owner, you have the opportunity to deduct various business-related expenses from your taxable income. For instance, you can claim deductions for interest payments and fees associated with your business loans, as well as other relevant business expenditures. However, it’s essential to maintain proper records to substantiate these expenses.
Additionally, you might consider taking advantage of the federal government’s temporary full-expensing incentive. This initiative allows you to claim an immediate deduction for the entire cost of eligible assets that are used in your business operations. By leveraging this incentive, you can optimise your tax position and potentially reduce your tax liability.
To ensure you make the most of available deductions, it is recommended to consult with a tax professional or seek guidance from relevant tax authorities. They can provide specific advice tailored to your business circumstances and help you navigate the complexities of claiming deductions effectively.
- Meet your superannuation requirements
For businesses that have superannuation guarantee (SG) obligations, it is mandatory to make employee contributions. By fulfilling these obligations before 30 June 2022, you may be eligible to claim a tax deduction on your 2022 income tax return. This deduction can be claimed if the contributions are made to a complying superannuation fund or a retirement savings account with the intent of providing superannuation benefits to your employees. Meeting these requirements ensures compliance with SG regulations and may offer potential tax benefits for your business.
- Be aware of due dates
Put all the required dates in your calendar to give yourself a reminder that will help you avoid ATO penalties.
For more information please contact Hopscotch today at 1300 HOP 123.