Don't Lose Out This Tax Year - 5 Tips On Preparing For The EOFY
Updated: Dec 10, 2019
It’s that time of the year again when our office will be buzzing and we will be busy helping our clients lodge tax returns - End of the Financial Year! We know most of you are probably rolling your eyes right now, sorting your tax return is an extra chore on the list of things that need doing and one that you don’t probably have time for. But… it needs to be done and there are ways to make it an efficient process, perhaps reduce your tax bill or even get a refund if you use some of our handy tips below... now we’ve got you a bit more interested!!
No, we’re not talking about super-duper deductions, we’re talking about SUPERannuation! As you may or may not know, super doesn’t need to be paid until the 28th of July, but paying it early means it can be deducted in this year's tax return. The ATO will only let you claim deductions on super when they are paid, so paying employee super and making personal contributions before June 30th, ensuring they are in the recipient's account before that date, will allow you to make a deduction.
Get Ahead With Your Bills
If cash flow allows it, making payments for regular and recurring bills before June 30th will help to reduce your tax liability. Your typical bills like phone/internet, registrations, insurances, rates, rent, interest, power bill, etc are all immediate deductions. If you have the money to pay for them ahead of time and before June 30th it can be a great way to reduce your tax liability. Some businesses may even consider using a credit card to pay for these deductions now and pay the credit card off in the new financial year - ensuring you know you can afford to pay for it of course!
Don’t get too excited! Don’t buy things just because they can be claimed on tax, they still cost you to buy them remember. However, if you’re planning to or need to buy new equipment and you can afford to do so, before June 30th can be a good time to do it. Things such as tools, computers, and furniture can be claimed. Remember that you may only receive a $300 benefit for every $1000 you spend, so don’t be expecting it to all land back in your pocket next month. Again, a credit card can be useful in this situation if you know you will be in a position to pay it off immediately next month.
Write Off Bad Debt
It’s important to remember to write off your bad debts while they still exist, before June 30th. If you speak to your accountant they will be able to help you review your accounts receivable and determine if any bad debts will qualify for a deduction. If you can’t get the money from the customer, you’ll want to make sure you claim it in your tax return before it’s too late!
Organise Your Records
More so for your sanity than saving money, organising your records and creating a system throughout the year will not only help you when tax time rolls around and you need to remember everything you want to claim, but also important if the tax man ever comes knocking on your door. Having systems and procedures in place for your record-keeping means you can resolve any issues quickly if they do arise.
We would recommend looking at creating systems and procedures using the cloud. The safety of the cloud means that not only can you eliminate your shoebox of receipts and have them organised into folders that make sense, you are also reducing the risk of losing them in a fire or flood. When everything is organised on the cloud, it’s as simple as giving us access to the appropriate online folders to do your tax return. If you would like to know more about how you can implement a cloud system in your business, organise a meeting with us today and we can help you get it sorted.
P.s. we’re not talking about the clouds in the sky!!