The year-end can be a busy time for small business owners. This makes it even more important to set aside time to review your tax and financials to be armed for the new financial year.
Look at your tax early to keep on top of reporting due dates. This allows you to take advantage of deductions to minimise your tax liability. We have outlined a few tips below.
- Tax deductions
If you are an eligible small business, bringing forward post-July expenses to June can help you claim a deduction this financial year.
This can include buying a business asset such as a machine or equipment as well as computer hardware or software before 30 June for the chance to get an instant deduction. Some good news that came out of the most recent Federal Budget were that the instant deduction benefit for assets costing less than $20,000 has been extended to 30 June 2018.
Paying your business expenses early can help claim a deduction this year, so long as you meet the rules. Some costs you can consider prepaying are professional subscriptions, insurance policies and utilities.
- Write off bad debt
If you have customers who are unlikely to pay you in the new financial year, it may be time to write them off as a bad debt. You typically need to be write off your bad debts before 30 June. Make sure you keep a record of what the debts are and the actions you have taken to recover the debt to meet the ATO requirements.
- Pay your employee super
In addition to reviewing your own superannuation contributions, make sure your employee super contributions are in order. Consider bringing forward any super payment due in July, so you can claim a deduction this year.
There are numerous other matters worthy of consideration depending on your business circumstances. It is important you seek advice. Either way, update your financial statements before the end of the financial year so you can make informed decisions and plan for the next year. Always remember to keep to the deadlines for lodging your Business Activity Statements and tax returns with the ATO.
For clarification or commencing these strategies, please do not hesitate to contact us, or your accountant.
Rob Gilmour is the Managing Principal of Wealth Simplicity. The information provided should not be considered personal financial advice as it is intended to provide general advice only. The content has been prepared without taking into account your personal objectives, financial situations or needs. You should seek personal financial advice before making any financial or investment decisions.