It’s easy to get overwhelmed at tax time, especially if you’re a startup or small business owner doing a lot of the bookkeeping yourself. While it might seem daunting, there are many benefits to tax time – the most valuable being the ability to understand about the profitability of your business and have the insight to make relevant adjustments in the next year. To help get you started, our accounting team has put together five tips to prepare for tax time.
1. Do your research
Before lodging your tax return, it’s important to be familiar with the Australian tax landscape. This starts by taking the time to have a working knowledge of the tax deductions your business is entitled to. To get a working knowledge of these deductibles you can read more at the ATO website, which lists all the key compliance points and deductible expenses business owners.
Our accounting team is across all of the relevant deductible expenses so the items will get picked up. The old analogy in medicine is that, a good doctor and a good patient will improve the treatment outcome. The same goes with the accountant/client relationship.
2. Prepare your financial records
In order to lodge a tax return, it’s important to know your income and expenditure.
- Start by collating all your source documents – bank statements, investment and dividends, rental income, online purchases. Ensure that you keep your private expenses separate to your business expenses.
- Keep a record of all your valid tax invoices when you are registered for GST
- Keep adequate stock records and keep relevant records for motor vehicle claims, stationary etc. We hold the majority of these documents and you can confirm that you have a full set- that includes what we hold on your behalf and relent source documents that you have.
3. Using financial software
To help you track every single dollar throughout the year, a helpful tip is to use accounting software. Thankfully in a growing digital world, there are a variety of different options available depending on your business size and scale.
Locumsgroup is a Xero practice so we hold the majority of your source documentation. We will contact you to ensure all is in order.
While they do come at a cost, accounting software is incredibly helpful to save you both time and accuracy in reporting, leaving you with a more seamless process come EOFY.
4. Consider last minute purchases
If your business is set to report a profit, you may consider last minute investments and expenditure, like purchasing a new company car, purchasing other deductible capital items, or making further staff super contributions. Whilst you are still spending money, the actual purchase may be offset against your tax return, reducing your tax costs. Again, stay familiar with opportunities for tax efficiency by reviewing the ATO website.
Alternatively, leave to our accounting team.
5. Talk to us
Once you have completed the steps above, it is worth talking to a professional accountant to ensure you have considered all aspects of your business. And ideally to have that conversion pre 30 June! When speaking with our team, there are a number of factors we will guide you through to better understand what you can claim. This includes asking questions about your business performance, the personal use of your assets, and ensuring your records are up to date. Take the pressure off yourself this year and speak with our team about EOFY by emailing our team at info@locumsgroup.com.au
