How to avoid stress at Tax Time!



Does the mention of June 30 instantly make you feel stressed? Do you dread the end of the tax year because you know that it will cause you a mountain of work? With the right tax planning, it doesn’t have to be that way! 

There are lots of things that you can do throughout the year to ensure that June 30 is just another day.

1. The balance sheet
You need to make decisions for the year that has been, and for the year ahead. The only way you can do this is to have an accurate balance sheet that has been maintained month on month. You should know your receivables and if there is any bad debt that needs to be written off. Do you have assets that should be sold in order to offset gains or losses? Do you have outstanding tax liabilities that need to be paid and have you accrued all liabilities. Ensuring that you reconcile these items at least quarterly ensures that you know where you are placed and help you make good decisions.

If you carry stock in your business it is essential that you do a stock take. This allows you to assess whether you need to write off, write down or revalue your stock.

If you are able to provide your financial advisor with a realistic profit/loss and cashflow for the next 12 months they can better identify opportunities to defer current liabilities. This will mean that you are less likely to be in a loss position next year. By having clearly defined short and long term goals you can work with your advisor in creating a plan that factors in your personal circumstances and helps provide a more positive financial position for you in the future.

2. Maximise deductions
Deductions help you to maximise your profits. Understanding everything that has happened in your business over the past 12 months can make sure no opportunities for deductions are missed. Make sure all of your liabilities are paid such as staff superannuation, staff bonuses and accrued leave loading.

Purchase FBT exempt assets such as laptops, mobile phones and other tools of trade. This is particularly important this year for small businesses who want to take advantage of the immediate deduction for the cost of depreciating assets acquired for less than $20,000 ceasing on 30 June 2017. Once legislated the definition of small business will change from 1 July 2016 from $2.0m to $10.0m turnover expanding the businesses that can access the SME tax concessions.

3. Personal Tax Matters
Is there an opportunity to prepay some expenses? These include prepaying interest, rental property expenses and other investment expenses. Review the timing of sale of investments that you own. If you are in doubt it is always best to check with your accountant or financial advisor for help with this.

Make sure that you have the details of any work related deductions that might be industry specific and can be claimed as a tax deduction. This includes your motor vehicle log books and work related travel diary.

Consider making charitable donations that may be tax deductible.

4. Tour de France
Ok, so this might not be tax related but it does start in early July during the French summer. With the right management of your finances throughout the year, you might be able to leave the tax worries behind and spend a month in France!

Chat to us today if you are concerned about year end and need proper planning completed on your affairs.  

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About Author

Tanya Moran
Tanya Moran

Tanya Moran is a Senior Partner and the Lead Taxation Partner of Azure Group. She has more than 20 years' experience working with a large array of businesses from small accounting firms to large international corporations.

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