Many business owners shudder at the mention of tax time, but it doesn’t have to be a stressful time. The key to a stress free tax time is preparation. The earlier you start preparing the easier it is.
Here are our top tips for being prepared for tax time:
1. Be aware of deadlines
Missing deadlines can be catastrophic for businesses. It can prompt fines or mean that you can’t claim certain expenses. Unfortunately, in most cases once the tax year has passed you can’t make changes retrospectively. Therefore, there is no use finding out about something you could have claimed or money you could have saved last year if only you had known about it. Consider anything that you want to buy or prepay before 30 June. Missing deadlines with the ATO can also trigger an audit…..
Related: Received an Audit letter from the ATO? This is what you should do...
2. Records ready
Having all the information on hand for your bookkeeper and accountant is key. The less double handling the better. If key documents and records are missing the accountant will need to stop what they are doing and wait for you to find the missing documents. This can cause delays and extra work for you both. So, make sure you have everything on hand.
3. Capital Gains Tax (CGT) concessions
Speak to your accountant to ensure that you are taking advantage of any CGT concessions that you may be eligible.
4. End of year deductions
Once we are in July you have missed your opportunity to claim in the previous financial year, manage your tax position. By having a tax professional working with you, they will ensure that you are making decisions now in your business that can help you come end of the year. There are also lots of opportunities to claim different things or structure your tax in a way that will minimise your liabilities. Don’t do your taxes yourself in the hope of saving money, if at the end of the day you pay more tax because you didn’t know what you could have been claiming.
5. Changes
The tax system is changing regularly, and so is your business. What applied to you last year may not this year. Check with your accountant to see if there are any changes that might apply to you and your business.
6. Reconciling bank accounts
This can be a tedious task if you don’t stay on top of it. Make sure that in June all your previous bank statements are reconciled so that you only must worry about June at the end of the year. This also makes tax planning and forecasting more efficient and more accurate.
7. Payment plan
If you think you are going to owe money to the ATO and will need a payment plan, start preparing this. Look over the business and determine how you will be able to manage these payments and have this ready for your accountant. Get on the front foot with this one.
For those businesses that have been affected by COVID-19 your Accountant can contact the ATO on your behalf to request a low interest payment plan to help you pay existing and ongoing tax liabilities.
This year involves a lot of changes and lots of business stimulus packages. Make sure you are seeking professional advice and help so that you are making the most of these and gaining the greatest benefit for your business. Contact us today if you need help with any of your obligations for this financial year.
Related: Why your business needs professional Tax preparation services?
Have you noticed our #EOFYTaxTips... here's one that relates to #Taxation
"The ATO will provide administrative relief for certain tax obligations for taxpayers affected by COVID19 on a case-by-case basis. If your business is affected, you might be eligible to apply for relief."
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