It’s no secret that for a lot of small business leaders the end of financial year is wrought with anxiety – running a business keeps you busy enough without having to worry about the extra workload that comes with tax time.
So with crunch time nearly upon us, I’d like to share my advice for things you can do now and in the years ahead to sail smoothly through to the end of each financial year.
Seek Quality SMB Tax Advice
You don’t have to go it alone. There’s a place for both accountants and financial planners during tax time and it’s important to get them working together, for you, so you can make smarter decisions for your business.
Each professional can bring their own specialties to the table – accountants know the ins and outs of ways to spend strategically before the end of financial year, whereas financial planners have great foresight and can help you make decisions now that will benefit you down the track.
In what is surely welcome news for small business owners, the Australian Government has just extended its $20,000 instant asset write off to June 30, 2019. Is this an opportunity to splurge on fancy new equipment, or would a professional suggest a better way to apply this incentive effectively?
Don’t spend for the sake of spending. Think about expenses and keep cash flow front of mind as you approach the new financial year. $20,000 is a lot to outlay at once and could leave you out of pocket for a while. You want to make sure you’ve got enough cash on hand to cover your expenses.
Remember, advice fees are tax-deductible on an ongoing basis if the advice is relating to income-generating activities, so you don’t have to feel guilty about forking out for a bit of help.
Smart Super For The Self Employed
Around 2.4 million Australians are self-employed and generally don’t have to make superannuation payments for themselves, but that’s not to say they shouldn’t. Getting into the habit of making personal contributions to your super fund is not only a sensible way to save for retirement, but a smart way to invest any spare cash you’ve got lying around at the end of financial year.
If you haven’t hit the $25,000 cap for before tax contributions this financial year, why not make a lump sum contribution to your super fund? You’ll be able to claim a full tax deduction for any contributions you make until you turn 75.
Don’t forget if you’re self-employed and consistently working from home, it makes you eligible to claim part of your household expenses including electricity, internet, or even your rent.
For accountants, archive boxes overflowing with receipts are the stuff of nightmares and given the technology we have at our disposal today, there’s no real need for them to exist anymore.
In my business, I only use paper where it’s absolutely essential. We use digital signing and electronic confirmations where we can, communicate digitally in meetings, and provide clients with digital copies of advice documents.
There’s some great receipt apps that allow you to take photos of your documents as you go. You can immediately send a photo of your receipt off to your expense department, bookkeeper or accountant to be stored digitally in real-time. Technology is your friend when it comes to tax time.
To find out how to lodge returns easily using Acrobat Pro DC in 5 simple steps watch Adobe’s on-demand webinar.