We’re almost at the end of another financial year, so here are our top tips on what you can do to lessen the pain of tax time, and more importantly get yourself in a great position for the year ahead.
Find out if there’s any important tax legislation or initiatives
Staying on top of legislation that might affect your business is always important. One ruling that all eCommerce businesses should be aware of is the ATO’s recent ruling “Income Tax: deductibility of expenditure on a commercial website”. It’s designed to clarify the ATO’s expectations in relation to how to treat expenditure that your business incurs in relation to your online presence. It’s definitely one to bring up in conversation with your accountant.
Maximise your deductibles
Deductibles are certainly something you need to be on top of by 30 June. The ATO’s accelerated depreciation measure is still in full effect, which, depending on your annual revenue, means any assets up to the value of $20,000 purchased before 30 June 2017 can be immediately written off for tax purposes. It means you can get the full amount deducted from your tax this year. You might also want to consider bringing forward deductible expenses into this financial year, or even prepaying some of your costs such as rent, utilities, insurance or electricity.
Minimise your capital gains tax liabilities
It’s definitely worth looking at your capital gains tax position if you’ve made a capital gain this year. You may be able to offset those gains by selling assets that have made a loss. It’s probably best to do this in consultation with your accountant or tax agent to make sure that any assets you sell qualify for the capital gains tax discount.
Look at what you can write off
This is a great time of year to review any bad debts and consider just what can be written off. Just remember that you must clearly document what the debt is and what steps you’ve taken to recoup it. You must also write them off by 30 June if you want to minimise this year’s tax bill. However, it’s not just bad debt that can be written off. Look at what old, damaged or obsolete stock can be written off before 1 July, as you’ll get an immediate tax deduction for the value of the write-off.
Update your record keeping
New year, new you – or at least new accounting and record system. If you’re not keeping proper records you could be missing invoices or payments, and that certainly makes this time of year that much harder than it needs to be.
If you haven’t made the jump to cloud-based business or accounting solutions yet, now is the time to consider it. They’re not only easy to use and affordable, but most platforms offer a wealth of tools and resources that can help you keep better track of receipts, invoices and bills. More importantly, it can free up your valuable time, which your ‘30 June 2018’ self will certainly thank you for it!