Every small business owner knows the stress that comes with the end of financial year.
A lot of valuable time and energy gets poured into getting your paperwork in order and making sure that you’re minimising your tax bill as much as possible.
The good news is that there is still time to sort things out, and with this checklist you can feel confident that you are on top of your tax:
Get on top of your records
If you’ve been organised this year then you deserve to give yourself a big pat on the back! However, taxpayers who have fallen behind on any record keeping, are advised to take any necessary steps to get up to date, including seeking external assistance.
Record keeping is critical and it is imperative to stay on top of your responsibilities.
Write off bad debts
Unfortunately, there will be times that a client does not pay you for work that has been completed. This is known as having a bad debt and it is an extremely frustrating situation for any business owner.
A small consolation can be found in the fact that bad debts are tax deductible. In the event that you have a bad debt, it should be formally written off in your financial records. You will then be able to claim it as a deduction against your taxable income. It may also be necessary for you to provide the ATO with proof that you have taken reasonable steps to recover the amount.
Seek advice about legislation changes
These changes may be from the last financial year, and, therefore, require you to take certain steps in the next few weeks. There may also be additional changes that will be announced in the upcoming May Budget. It is important to be aware of any impending changes as they may influence your tax strategy and decisions as June 30 approaches.
Get the ball rolling on stocktake
Retailers and wholesalers are required to undertake a stocktake at the end of each financial year.
However, if your annual turnover is less than $2 million and the difference in value between your opening and closing stock can reasonably be estimated to be less than $5000 then you are exempt from this requirement.