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6-Step Checklist for EOFY 2019: Tax Tips for Australian Small Businesses

The 2019 financial year is really coming to a close, and as a small business owner, you are probably feeling petrified of the upcoming “tax time blues”. You don’t have to have a horrible experience during the EOFY, in fact here are some tax tips in 6-steps to help you ease the stress of the “tax time blues”.

Tax Tip #1: Take FULL advantage of the $30,000 instant asset write-off

Are you in need of a new laptop for work? Or perhaps, a functional professional website that generates fast conversions? You can get it all, thanks to the Australian Government’s $30,000 instant asset write-off scheme.

In helping small businesses pursue new ideas and create more jobs, the Australian Government has offered a scheme that allows businesses to claim immediate deductions for depreciating assets, each valued up to $30,000. So, if you are an Australian small or medium sized businesses with an aggregated turnover of less than $10 million, you could be eligible for this claim. Note: assets must be purchased and installed before June 30th, 2020. 

To learn more about this write-off and how you can benefit from these tax tips, read here.

Tax Tip #2: A Must! Work-related Deductions

Make sure to get your deductible expenses done well before the end of the financial year. This may include costs such as rent, utilities or repairs. The first of tax tips from us is, if you generate an income from home, by nominating your home address as your place of business, you could receive home office deductions back from your expenses such as internet and general household costs like rent, council rates, water, and electricity.

However, it is advised that businesses must ensure all deductions are part of their assessable income and business expenses must definitely have a business connection. “Working from home” or “bringing work home to do” is considered a convenience and will not be recognised by tax officers. Make sure that you don’t wrangle personal expenses with business, otherwise, your bookkeeper or tax officers will pick it out.

Tax Tip #3: Don’t forget to use the Income Tax Offset

If you have a sole proprietorship, partnership and family trust earning under $5 million, it’s likely you’re eligible for the small business tax offset. By using this tax offset, you’ll be able to reduce your tax by up to $1000 each year. To read more, click here. 

Tax  Tip #4: Plan your holidays for the next Financial Year

By planning work related holidays ahead of time, it’s possible to have your travel costs tax deducted. As long as the primary purpose of your trip is business related i.e. professional development, client meetings, you may be able to claim back your airfare, accommodation, and other travel expenses. Note: visas, passports and travel insurance will not be tax deductible.

However, if any part of your business trip is for private enjoyment, you’ll only receive a proportion of the tax deductibles by cost.

If you plan to bring your family along for the trip, you’ll only be able to claim tax for the people involved in the business. Otherwise, costs incurred will not be deductible.

Tip: Make sure to bring a travel diary or log book to note down the correspondences between yourself and your colleagues, during and after the trip, communications with travel agents, third-party invoices and itinerary. To read more about tax-deductible holidays, click here.

Tax Tip #5: Claim tax deductibles for personal super contributions

Owning your small business means you may be able to claim a tax deduction from your super. If you transfer super directly from your bank account to your super fund, you are able to claim tax for your personal super contributions. To find out more, read here.

Tax Tip #6: Converting bad debt into a great thing

If you have any outstanding debt that may not recover, by writing if off, you can receive a tax deduction on the number of bad debts. This debt, however, needs to be included as assessable income in the current or previous income year and should be written off before the 30th June if you want to claim it this financial year.

Leading up to the end of the financial year, hopefully, this 6-step tax tips checklist comes in handy for now and the future. EOFY tax time doesn’t have to be a chore. Make it simple and fun and make sure to reach out to a tax agent, your accountant or even us, if you need any financial and accounting assistance.

Is your business taking advantage of the $30,000 Instant Asset Write-Off? Find out more here on how you can benefit from this tax scheme, where EOFY THING can be tax deducted.

Disclaimer: This blog is for information purposes only and does not constitute advice. Remember, registered tax agents and BAS agents can advise you correctly on this matter.

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