6 Tips to help you prepare for EOFY
The past couple of years has certainly been a rollercoaster ride for a lot of businesses, with many situations out of their hands. With the end of financial year nearly upon us, there is one situation we can have some level of control over, and that is how much money we have to pay in tax this year. Here are a few ideas to help us minimise just how much that will be.
1. Check your current financial situation with your Accountant.
With many businesses now utilizing programs like Quickbooks and Xero online, it is easy for your Accountant to jump in and take a quick look at your books. Doing this while you still have a bit of time up your sleeve may help you with those decisions around spending or saving what is in your account now before the tax man comes along.
Not using one of the online systems? Now might be the time to start. If this system is connected to your POS, bank and utilized for purchasing, managing your books and obtaining snapshots of your business will become a lot easier.
2. Instant Asset Write-off
With the Instant Asset Write-off scheme extended once again, any profits currently sitting within your account may be best spent on purchasing that new Coffee Machine, Tables and Chairs or kitchen equipment your venue so desperately needs.
Ensure you run the idea past your Accountant or Financial Adviser first, to check that your purchasing gives you the tax break you are looking for.
3. Get rid of bad debt
The last few years have been tough for the hospitality industry. Covid and floods have certainly created challenges, but they have also created opportunity. If your business is looking to turn a profit this financial year, it might be a good time to let go of those hard to recover debts. These debts will come off your income in the year in which you write them off, regardless of the year you invoiced them.
4. Pre Pay Expenses
Like you have with writing off Bad Debt, paying some of those bills now, especially if you are running on a Cash Basis, will help reduce any profits you have made. This can be things like your rent, insurance, and subscriptions to any professional associations. Up to 12 months of the coming year’s expenses can be deducted in the current tax year.
5. Get records in order
If your claiming it, you need to prove it. Make sure you have all receipts and invoices in order prior to June 30 to help smooth out the tax process. It is highly recommended as a minimum you photograph each of the receipts you receive. If using an online accounting platform, these receipts can be connected to your expenditure, making it easy to do your returns. You are no longer required to keep your original paper receipts as long as you’ve kept electronic copies that are a true and clear reproduction of the original.
The ATO app includes a free myDeductions record keeping tool to help you keep track of your expenses.
6. Top up your super
The one thing generally overlooked in a business is you. Plan for your future by investing some of your profits into your super. You can contribute up to $25,000 in deductible super contributions each year. Tomorrow you will thank you for this.
We hope these tips are a catalyst to get you talking with your Accountant or Financial Planner and they can help you to minimise your tax burden.
The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.