Tax Tips for Small Businesses
Taxes are one of the most important issues facing small, growing businesses. Business owners need to ensure that they are meeting all their responsibilities to the ATO – and also seizing every opportunity to reduce their taxes.
Remember important deadlines
We are all aware of that the ATO requires individual tax returns to be lodged by a certain deadline. Similarly, the ATO has deadlines for businesses to lodge activity statements, GST returns, FBT reports, PAYG withholding reports, superannuation and income tax returns.
Keep your books in order
Good record keeping is fundamental to a successful business. Business records which should be kept include invoices, receipts, cash register tapes, banking records, creditors invoices, wage records, cheque butts and cash books. Keep an asset register to record what assets you purchase for the business.
To make life easier, make good use of the wide selection of software packages and online facilities available these days. Remember to store all your documents in a safe place for at least five years. Work papers are also desirable as they assist in thepreparation of proper accounting records for the determination of income tax liability.
Deductions and charitable contributions
Some tax deductions are obvious, like office expenses, rent, employee wages and business travel. Also, keep in mind other deductions such as depreciation of assets, trips that combine business and pleasure and advertising costs. Be consistent with your deductions; driving to meet with a client can sometimes be forgotten.
Charitable contributions can usually be claimed as deductions on your individual tax return. However, make sure the charities are endorsed by the ATO to maximise your return.
Regularly review with your accountant
Your accountant can help with your tax planning, so don’t leave it too late to provide your accountant with your financial records. That way your tax returns can be lodged on time, with no unnecessary delays.