A dollar saved is a dollar earned. But we’re talking more than just a few dollars here, which means it’s vital you’re taking a best-practice approach to your tax return.
Here are five ways we can help ensure next year’s tax return is your best one yet.
1. Separate your business and personal accounts
Many small business owners use their business bank account as their own personal ATM machine.
However this creates the risk that business and personal transactions will become mixed up, makes it more difficult to claim GST and tax deductions, and increases the risk of a tax audit.
By establishing a business bank account that’s separate from your personal bank account, submitting your tax return is as simple as printing out your bank statement and bringing it straight to us. This ends up being a quick and cost-effective way of calculating your business expenses.
2. Establish a second business account for tax and GST
Cash flow is critical, but with GST due every quarter, it can be a real killer.
By putting away small amounts of cash throughout the year into a separate account, you’ll take the pain out of paying your GST.
3. Quit using cash for business transactions
When you’re using cash, it’s easy to misplace a receipt or forget that you purchased that coffee or a cab ride which could be claimed as a deduction.
Over time, these transactions add up.
When you keep your business transactions cash-free, everything is recorded by your bank, making it easy to tally deductions and make sure no transaction is missed.
So remember to keep your business transactions where you can see them – through a clear electronic record.
4. Understand what you can claim
Many small business owners don’t take the time to understand what they can and cannot claim as a tax deduction.
With people increasingly working from home, the range of items you can claim as a work-related business deduction is increasing from year to year.
However, if you don’t know what you can claim, you’re going to miss out on tax deductions, or worse, run into trouble with the ATO for incorrectly claiming an expense.
So make sure to double check with us during your next visit so that you know what you’re entitled to claim.
5. And finally, get your tax return in early
The quicker you submit your tax return, the quicker you will receive your refund.
If you’ve got tax payable, getting your tax return done early buys you time to pay it off. After all, we don’t have to lodge your return until it’s due. In the meantime, you can create a plan to ensure you’re not scrambling to pay your tax bill.
So contact us today if you’d like us to help you set up a better tax return. We’ll take into account all your individual circumstances to make sure your next return is the best one yet.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without the prior written consent of Finance Matters, which is where this article also appeared.
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