Tax time is on the horizon again, and this year I promise you won’t leave it until the last minute.
There’s nothing more satisfying than getting your tax return prepared ahead of schedule and this year there’s more than one reason to look forward to tax time.
The good news for small business it that the ATO has extended the $20,000 instant asset write-off for equipment expenses for the 2017/2018 financial year.
So, if you’re running a business with an annual turnover of less than $10 million, you can claim individual expenses of up to $20,000 worth of depreciating assets. You can instantly write-off 100 percent of any business-related purchase.
This year it will pay to get your return prepared ahead of time. So what can you do now to get organised? Here’s a shortlist of what to bring to your accountant so he/she can prepare your tax return quickly, efficiently and with the maximum return:
A good starting point is last year’s tax return, particularly if you have a new accountant. It should have your personal details, tax file number, income streams, tax offsets, deductions and other relevant information on items previously claimed.
It’s always worth understanding your tax obligations rather than leaving it all for your accountant. Have a look at the ATO website to get an overview of the tax process.
If you haven’t started already, from today, right now, start a filing system for your receipts and records of expenses. Better still, use an app to scan and file them digitally, so all you have to do is send the file or a link to your accountant. Even better than that, create a spreadsheet of your expenses to send to your accountant and score maximum brownie points.
These days all business owners have the option of using a cloud accounting program, and it’s worth looking into using one of these tools to make your tax life more manageable.
Throughout the year, you can regularly plug in your finances so that all you have to do at tax time is pull the relevant reports. You also have the option to give your accountant access to your account, meaning you’ll have even less to do at tax time.
Before you go ahead and give your financial details to a new accountant, it’s a good idea to search the Tax Practitioners Board, to make sure they’re registered.
Depending on the size and type of your business, according to this article from MYOB, you’ll need to prepare details of all or some of the following:
As mentioned above, if you’re a small business, you can purchase up to $20,000 of assets before tax is payable. Although this isn’t an excuse to go crazy, it’s a good time to think about what will benefit your business – for example a new vehicle, updated computers or a spruce up of your decor.
Other expenses include:
Finally, there are the usual tax documents to prepare which are the same every year.
With all the above information, you and your accountant can figure out if you’re entitled to any tax incentives and deductions. For example, if you work from home, you may be eligible to claim back some of your rent or mortgage, and electricity. Check the ATO website to see your entitlements.
Follow the steps above you’ll be ahead of the game long before your return is due. Your accountant will be able to process your return quickly, getting any rebate back to you sooner. Congratulations! You’re done for another 12 months.
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