Now that we are ‘somewhat’ there, my attention like most of you at this time of year is turning to ‘how much tax am I going to have to pay?’. 30 June signifies the end of the financial year and with some careful review of your numbers and specific advice you can take best advantage of the taxation environment. Inevitably the question is “how can I avoid tax?”.
Asking a question like this of an Accountant is a double edge sword. Accountants don’t want you to pay tax unnecessarily, but at the same time if the Accountant has been your Trusted Advisor throughout the year, they would consider that paying tax in your business means that there is a likelihood of the business performing well.
Get yourself organised!
Reconcile your entries in whatever system you keep. Do you have transactions to code, do you have bills to pay, have you deposited every cheque (See our tips for getting paid faster!).
Documents to Organise (preferably in electronic format)
- Bank Statements
- Dividend Advice
- Investment Year End Tax Statements
- Finance/Loan Documents
- Loan Statements
- Rental Property
- Agent Yearly Summary
- Rates Notice
- Insurance Premiums
- Interest/Loan Statements
- Capital Items
- Capital items Tax Invoice
- Motor Vehicle Tax Invoice
- Plant & Equipment Tax Invoice
- Intangible Assets documentation
- Business Plan – if updated
- Superannuation Contribution confirmation
- Employee/Employment records
- Have you reconciled your payroll?
- Legal advice
- Did your business receive legal advice during the year?
Things to keep in mind
Identify any capital items or unusual items
Have you purchased a motor vehicle or excavator or computer – what is the maximum capital allowance (depreciation) you are eligible to claim – is there anything you need to be aware of like keeping a log book or what type of financing did you use to purchase the fixed asset?
Have you lodged all of your regular compliance obligations?
Have your BAS’s been lodged have you lodged your Payroll Tax returns (the last year has been a doozy for anyone paying state payroll tax in multiple states), have you lodged your Fringe Benefits Tax Return, if you have employees have all of your single touch payroll filings been completed?
Have you made income on investments that you have forgotten about?
Often we see ATO audit activity for clients who have ‘forgotten about’ a bank account or shares or a fund that grandma set up for you as a kid. Look in to these, collate the information or update your details like tax file number or contact details
What do you need to do before 15th June and then before 30th June?
Paying super should be done by the 15th of June in order for the super fund to acknowledge the deposit. Paying your employees wages and super before 30 June will be necessary to claim a tax deduction in the current year.
Goodluck! Wishing you and your business a successful tax time.