With 30 June in sight, is your business ready for the End of Financial Year (EOFY)?
It’s not too late to take actions to reduce your tax for 2013.
Below are a few hints, tips and things to consider before the next financial year begins so you can make the most of tax time.
- The small business tax break
Depreciating assets can be immediately written off if they cost less than $6,500. Consider bringing forward expenditure on deductible items before 1 July and gain a cash flow advantage.
- Purchasing a motor vehicle
If you have acquired a motor vehicle in 2013, the first $5,000 can be immediately deducted. The balance is depreciated as part of your general small business pool, at 15 per cent in the first year and 30 per cent in later years. If you’re looking to buy a new vehicle, consider doing so by 30 June to reduce your tax bill for 2013.
- Consider how you will keep business records from 1 July
1 July is an ideal time to change your book keeping system. Have you considered the benefits of moving to a cloud based accounting program? Many of my clients have recently moved to cloud based MYOB, Quickbooks or Xero software. Business owners are saving valuable time with the benefits of this new bookkeeping system. Cloud options start from as little as $29 per month and the benefits are huge!
- Clean up your stock
Now is the time to review whether you have any obsolete stock and write it off. Determining that stock is obsolete may mean some tax savings on this years tax bill. You can identify such stock when completing your end of year stocktake.
- Update your logbooks
The first thing to check is how old is your log book is. Has your business or work related travel changed since you last completed a log book? Having an up to date log can ensure you are claiming for all motor vehicle expenses that are business related. And if you replaced your car recently it is important that you complete a new log book. Don’t forget that log books need to be kept for a period of 12 continuous weeks and record all travel, including business and personal.
- Write off bad debts
Writing off bad debts is probably one of the most common tax breaks used by small businesses during the financial year. Now is the time to assess any old invoices that you are not likely to receive.
- Beware of GST compliance
The Federal Government is cracking down on GST compliance for businesses, so make sure you are prepared. Know your obligations and ensure GST returns are up to date.
- Payment Summaries
PAYG Payment Summaries for employees need to be provided to employees by 14 July. Avoid ATO penalties by ensuring your payroll records are up to date ready to process the end of year payroll. Information is available at www.ato.gov.au.
- Fuel Tax Credits
If your business uses machinery, plant, equipment or vehicles, you may be able to claim fuel tax credits depending on the type of fuel and how it’s used. Talk to us for more information or visit www.ato.gov.au
Melanie joined Taggart Partners in January 2000 after completing a degree in Commerce at the University of Newcastle.
She specialises in taxation and accounting for small business and works with a diverse range of clients throughout the Hunter and beyond. Melanie has expertise in assessing bookkeeping and administration needs of businesses and providing accurate and time and cost effective solutions as well as Capital Gains Tax and advising on new business purchases and set ups.
Melanie is a member of CPA Australia and the National Tax Association Australia
In her role as Associate she oversees practice workflow, systems and staff. Melanie has been integral in developing a range of internal procedures that have provided new efficiencies for clients and staff. In 2008, with a group of local business women, Melanie established a network for like-minded Hunter business people, genXwomen, and is the organisation's founding President.