With the end of the current financial year 2020 – 2021 just around the corner, business owners are preparing for, and anticipating what for many is one of the most stressful times of the year. With that in mind we have prepared a few simple end of financial year tax tips for you to consider.
Do you need more hands-on help than our EOFY tax tips? Get in touch with us at Taggart & Partners; call (07) 3391 1188, e-mail email@example.com or get in touch online to speak to a tax accountant who can safely guide you through the quagmire of your business tax obligations.
Essential End of Financial Year Tax Tips
The essential EOFY tips can be summarised in these key points (we expand on some of these points in more detail further below).
- Mark all relevant due dates in your calendar and stay on top of your deadlines.
- Learn about what records you will need.
- Check your tax deduction and concession eligibility.
- Confirm whether your tax agent is registered.
- Update yourself on any recent tax changes that may affect you.
- Watch out for tax time scammers.
- Get your finances in order.
- Update your business plan.
- Update your marketing plan.
- Review your business structure.
- Get on top of your insurance matters.
- Securely back up your records.
Now, let us have a look at these end of financial year tax tips in more detail.
Record Keeping Checklist
You will typically be required to have the following records handy at the end of the financial year:
- A profit and loss statement.
- Stocktake records.
- Debtor and creditor record summaries.
- Records of asset purchase and improvement expenses.
- Income tax return records.
- PAYG (Pay as You Go) withholding records.
- FBT (Fringe Benefits Tax) records.
- GST (Goods and Services Tax) records.
- Records of meeting your superannuation obligations.
You may wish to consider making digital copies of all such important documents and securely backing them up to make sure that even if the hardcopies are lost or damaged, you can still access this key information.
Deduction and Concession Eligibility Review
Most business-related expenses can be claimed as tax deduction under the condition that the directly relate to your income earning business operations. You must have records of how such expenses contribute to your income earning, however. A few common examples may include:
- Expenses in setting up a website.
- Car expenses.
- Home office expenses.
- Business travel expenses.
- Equipment purchases.
Staying on Top of Tax Changes
Make sure you are aware of any changes to your record keeping, reporting and other tax obligations by checking the Australian Tax Office small business newsroom often. The tax year 2020 – 2021 has certainly been unusual due to the still ongoing COVID-19 pandemic and this may have also affected your tax-time related circumstances. The ATO’s COVID-19 page may be a resource worth familiarising yourself with.
Tax time is a period of increased scammer activity and you need be vigilant of tax refund scams where scammers may promise a refund of previously overpaid taxes, asking you first to pay an administration fee. Scammers can also use scare tactics with a sense of urgency and immediacy in their tax owed scams, where they try to intimidate you into paying what they claim is underpaid tax. You can learn more about common scams targeting businesses and how to remain vigilant and protected by visiting business.gov.au.
Review of Business Finances
There are clear benefits to working with an accountant or a bookkeeper. A professional can help you stay on top of your business finances, forecast business performance for a foreseeable future and even develop a cash flow improvement strategy to put you in a better overall position moving forward.
Business Structure Review
Your tax obligation compliance matters can depend on your business structure. At Taggart & Partners, we can help you with professional business structure advice to ensure your business set-up works for you.
Any Top EOFY Tax Tips Will Often Come Down to One
There is a lot of technical jargon and plenty to be aware of when preparing for the end of a financial year. You need help that goes a little bit further than end of financial year tax tips and our business accountants can help you.
Call (07) 3391 1188, e-mail firstname.lastname@example.org or get in touch online now. Do not delay, the sooner you contact us, the better we can help you prepare for the end of financial year 2020 – 2021.