The year is racing by already, and before you know it, it’s going to be time to prepare for your tax return. Small businesses contribute more than $380 billion to the economy each year and are a huge part of supporting economic growth in Australia. We know that running a business can be stressful and difficult, which is why we want to help you prepare for tax time in 2021.
Ensure Your Records Are up to Date
One of the biggest stressors when it comes to tax time is the fact that records are not up to date and/or are difficult to untangle. You want to ensure that your records are consistently up to date, so that managing tax time is straightforward. Plus, the benefits of this extends beyond tax time — when your records are up to date, it’s easier to lodge your tax returns, to manage your cash flow and to have a broad understanding of exactly how your business is operating.
- Use a record-keeping app or online tool to make tracking sales and expenses simple
- Have a day or time slot where you go through every single week and ensure that your expenses are up to date
- Be thorough and consistent when it comes to your record keeping
Make Sure You Understand Small Business Concessions
There are plenty of tax concessions available to small businesses which can assist you at tax time. Certain rules around trading stock might mean that you don’t need to do a stocktake, for example, while other concessions allow you to claim immediate deductions for expenses like start-up costs and legal/accounting advice. If you understand these concessions, it makes claiming for them a whole lot easier.
- Using simple depreciation rules? You can claim the $20,000 instant asset write off for your business so long as you purchase and install the asset costing less than $20,000 by the 30th of June 2021.
- Take a look at the ATO’s information guide to find out what else you can access as a concession
Sort Out Your Deductions
When running a small business, there are many things that can be claimed as a deduction. It might be things like a business travel expense, a home-based business expense or the costs associated with your employees. Make sure you understand (and have records of) your deductions prior to tax time.
- Ensure you have spent the money on your business
- If there is a business and private purpose to the item or service you have purchased, remember that you can only claim the business portion
- Keep records from all of your purchases
Sort Out GST/BAS
If you are a business that is registered for GST, then you need to ensure that you have sorted out your GST payable and claimed any input tax credits for eligible GST purchases. Your BAS needs to be up to date, and it’s a good idea to start planning for your business tax return sooner than later. Working with your bookkeeper is a good place to start; ensure that you have regular catch-ups with them and sort out what you need to know.
- Make good friends with your bookkeeper — they can ensure that your tax liabilities are sorted out ahead of time
- Work with a cloud-based software like Xero, MYOB or other recommended software to ensure ease of accounting
Get Professional Assistance From Go Figured
We are a Brisbane business bookkeeping service provider and we are committed to the successful management of your business accounts. We keep lines of communication open and are quick to remind you if you ever need anything completed or updated. We have over 20 years of experience in administration and 18 years of experience in bookkeeping. You can rely on us to provide you with exceptional service.