8 Tax Tips Only Your Bookkeeper Will Tell You
The end of the financial year is literally just a couple weeks away. Are you ready to complete and file your taxes? Normally it’s best to make strategic plans to minimise your tax bill at the start of each year. This way you aren’t in such a rush at the end and are less likely to leave out an important deduction, or file late. The following are a few tax tips that every good bookkeeper knows that should help you get your tax and other paperwork in order.
Did you invest in assets for your business? Don’t forget about the passage of accelerated depreciation for small businesses last year. This tax break allows small businesses with annual revenue of $2 million or less to write off the full value of the asset in the first year, up to $20,000!
Keep track of your deductions and keep your receipts. In addition to writing off $20,000 in asset purchases, don’t forget to track, and get receipts, for all of your regular deductions. For example, most small business owners have expenses associated with their home office, or expenses related to business travel, repairs, and other costs.
Just don’t forget to log the mileage for your business trips, and keep receipts for your other business related expenses. Also keep an eye out for less used deductions, such as those for your tools of the trade, expenses related to education and even gifts purchased by your business.
Have bad debts? Don’t wait, write them off before the end of year, rather than when you file your tax return, otherwise you might not be allowed to use them to reduce your tax liability.
Watch out for the Capital Gains Tax. If you will earn a capital gain this year, you might want to consider selling under-performing capital assets that have incurred a capital loss before the end of the year. This way you can offset your gain and reduce your tax liability.
Superannuation – the gift to yourself that keeps on giving! Concessional superannuation limits increased last year, from $25,000 to $30,000, and remain at $35,000 for those aged 49 and over. Don’t forget that you can also make up to $180,000 in nondeductible contributions annually, as well as bring those contributions forward for three years. If you need additional deductions to minimise your tax liability, consider bringing forward contributions to your employee’s superannuation.
Keep your feet on the ground, while keeping your books in the cloud! If you haven’t already done so, consider moving your books, along with the storage of your receipts and other important tax documents to the cloud. This way, you are less likely to lose important receipts or other documents and make it easier to keep up with everything so that you don’t miss any important deductions or declarations.
Resolve to plan for next year’s end of financial year, now. Resolve to get more organised, and use financial planning to prepare for the next end of financial year. This way, you have more time to take action to reduce your tax liability, and put your business on a more sound financial footing. Talk with your bookkeeper or accountant about the steps that you need to take now in order to be ready.
Minimise your tax liability, as well as avoid extra fines, by filing and paying your taxes on time. It may sound unbelievable at first, but many small business owners are so crushed for time at the end of the financial year that they invest great time and energy going through their paperwork and books and chasing down receipts only to later forget to file and pay on time!
There is a lot to keep up with as you prepare for the end of the financial year, and continue running your business. If you have questions, why not get in touch today, we’re here to help!