Small businesses are scrambling to get their accounts in order as the end of the financial year on June 30 draws near. Here are 8 tips that can greatly reduce your worries as you sort your business finances and allow you to take advantage of tax saving opportunities for businesses under $2 million in annual turnover:
Expenses. If the business cash flow allows you to pay for recurring expenses in advance such as rent, subscription fees and travel costs can immediately mean a deduction. Credit card payments can earn deductions if used to pay for tax – deductable expenses, provided it does not cover more than 12 months.
Future Expenses. Verify if you are entitled for an immediate tax deduction for salaries, wages and bonuses.
Spend for Improvements. Purchasing upgrades for your equipments will allow you to get the full tax benefit if purchased before June 30.
Bad Debts. Consult your accountant and write off bad debts before the June 30 deadline to verify if it is eligible for a deduction.
Repay borrowings. If an associate has any borrowings on the business, ensure that the appropriate interest is applied. Otherwise, you may be charged the entire loan as it could be considered taxable income.
Pay on time and avoid over-claim. Submit accurate returns and avoid over – claiming, as it will do you more harm than good. The Australian Tax Office considers this a serious offence.
Avoid guesswork. Consult your accountant and check out the ATO website for any questions that you may have for filing your taxes.
Read more about this on the Sydney Morning Herald website.
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