Home – New Forums Money matters Tax time/EOFY check in – how are you coping?

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  • #1237455
    Suze English
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    Hi to all of you lovely solo biz owners, just a little tax time check in since it’s such a stressful time of the year.

    How are you going with it all? Feeling on top of things, or perhaps feeling a bit stressed?

    If you have any tips to share with your fellow soloists to make tax time easier, please share them here in the comments or start a helpful post! And if you’re struggling with something in particular, be sure to create a post and ask our fellow members – there’s so much expertise and advice to be shared here.

    Mental health is more important than ever when stress is high, so make sure you’re tapping in to the support available if you need it. Here’s a couple of resources to get you started:

    Heads Up workplace mental health resources
    BeyondBlue’s New Access mental health coaching support

    If you’re struggling to afford accountant support to sort your taxes, the National Tax Clinic program might be handy for you. These clinics are government-funded and free advice is provided by university students who are studying tax-related courses under the supervision of tax professionals.

    We’ve also shared a bunch of expert tips and advice about getting your financials in order for EOFY on Flying Solo lately, so head over to the Financial Management category to read up on the latest tax advice.

    And as we head into a new financial year, a little reminder: A strong business needs a strong leader, so it makes sense to put your own wellbeing top of the list. Whether it’s mental health support or just mapping downtime into your day to fill your cup – all research points to personal wellbeing as paramount to success. So fill your cups, okay?

    Content Producer Flying Solo
    #1237457
    Justin
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    Following as I’d love to understand the challenges small businesses are having at tax time.

    We just launched Thriday! Thriday saves small businesses a huge amount of time and money by automating financial admin. It's like having a bookkeeper, accountant and transaction account all in one.
    #1237465
    Paul – FS Concierge
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    I have always made sure I have a buffer in the business bank account to be able to sleep well at night no matter what happens in the business.

    Covid comes to mind.

    One of the first things I did was assure my Manager and Supervisor that I was guaranteeing their jobs for 12 months – this was a huge benefit for me. And for them.

    So my tip is to have more money in your account than you think you will need.

    You can do this in any number of ways but one that might appeal to a lot of people is to set a goal for a Capital Fund and contribute 3-5% of profits to it per month until you have reached your goal.

    #1237494
    Suze English
    Moderator
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    Great advice, thanks for sharing @paul-fs-concierge . 🙂

    Content Producer Flying Solo
    #1237541
    Paul – FS Concierge
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    Pretty sad position to be in after 30 years in business.

    Hi @mediaman,

    It is crushing to read your story.

    I hope you find a way out of it with the least friction and destabilisation, on you, your business (and customers), on your family and your marriage if you are married.

    If I could offer advice, it is to gain a broad understanding of issues such as tax and forecasting yourself – I have often had to advise or correct some of the experts that I have engaged but I could only ever hope to have done that with the knowledge I have gained.

    There might be some fear and trepidation but I find most people can understand and apply concepts if they try.

    Best Wishes
    ~Paul

    #1237528
    mediaman
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    One thing we have never been able to master is creating and building a buffer to pay our GST and Tax obligations.

    I guess the simple answer is that we live beyond our means to a degree (and we don’t live lavishly, let me tell you!) which means we don’t ever seem to have a “bank” for tax debts or nasty little surprises.

    COVID didn’t help with Job Keeper adding a layer of Tax debt we just were not prepared for. Who was prepared tax on Job Keeper?? We weren’t even informed about that.

    So to cut a long story short, we have a massive 6-figure tax bill and nothing to pay it with.

    A combination of bad management, a lack of forecasting and guidance by our accountant, poor cashflow during COVID and the addition of Job Keeper Tax, means we are in a pretty poor position at the moment.

    Where to from here? Refinance house to pay tax debt? Sell house if we can’t pay obligation?

    Pretty sad position to be in after 30 years in business.

    #1237553
    Justin
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    I’m sure you’re not the only one in this position and sorry to hear it.

    Have you heard of the Profit First method?

    It wouldn’t have solved your issue with tax on job keeper but it’s a great tool for managing your money.

    We just launched Thriday! Thriday saves small businesses a huge amount of time and money by automating financial admin. It's like having a bookkeeper, accountant and transaction account all in one.
    #1237574
    Suze English
    Moderator
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    @mediaman, so sorry to hear it’s been such a tough time for you and your business. I’m hoping some of our members skilled in accounting and money matters may have some thoughts for you on where to from here.

    The stress you’ve been under must be enormous, and I do hope you’ve got personal support, whether at home with family or friends, or professional support via counselling or mentorship. Thanks for reaching out and sharing your journey with us.

    Content Producer Flying Solo
    #1237907
    mediaman
    Participant
    • Total posts: 138
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    I’m sure you’re not the only one in this position and sorry to hear it.

    Have you heard of the Profit First method?

    It wouldn’t have solved your issue with tax on job keeper but it’s a great tool for managing your money.

    Thank you Justin. I haven’t heard of that but I will look into it.

    MM

    #1237908
    mediaman
    Participant
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    @mediaman, so sorry to hear it’s been such a tough time for you and your business. I’m hoping some of our members skilled in accounting and money matters may have some thoughts for you on where to from here.

    The stress you’ve been under must be enormous, and I do hope you’ve got personal support, whether at home with family or friends, or professional support via counselling or mentorship. Thanks for reaching out and sharing your journey with us.

    Thanks so much, Suze.

    Yes, a very stressful time, indeed.

    We have managed to refinance the house which has taken some pressure off and we struck a deal with the ATO until we can see our way clear of paying the tax bill in larger chunks.

    At the moment we have a little relief, but I remain mindful that is only a bandaid fix.

    Many thanks for your reply.

    #1237914
    Paul – FS Concierge
    Keymaster
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    Hi @mediaman,

    It’s great to see that you have put a fix in place and can continue.

    I am nothing, if not practical and that part of my brain has me wondering if you will do things differently such that you can pay for the extra costs associated with your new finance arrangements as well as avoid digging the hole deeper?

    Can you share your thoughts?

    #1237932
    James Millar
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    One thing we have never been able to master is creating and building a buffer to pay our GST and Tax obligations.

    I guess the simple answer is that we live beyond our means to a degree (and we don’t live lavishly, let me tell you!) which means we don’t ever seem to have a “bank” for tax debts or nasty little surprises.

    COVID didn’t help with Job Keeper adding a layer of Tax debt we just were not prepared for. Who was prepared tax on Job Keeper?? We weren’t even informed about that.

    Hey MM. Firstly, hats off to you reflecting honestly about this …”I guess the simple answer is that we live beyond our means”. In my experience 90% of people in this situation would blame factors other than themselves. As they say, the first step in solving a problem is recognising and diagnosing that there is one.

    There is however a cautionary tale in this and I think it highlights exceptionally well something I see time and time again. When I hear the phrases “nasty little surprises” or “who was prepared for tax on jobkeeper” or “We weren’t even informed about that.” – it tells me that for some reason, there was inadequate advice or supervision over these matters (and as they say, ignorance is no defence). I know at our firm and most other decent ones, every business client was briefed on the in’s and outs of both cash flow boost and jobkeeper in April 2020. It took an entire month, two partners and about five staff dedicated to zoom meetings with each client to assist them – 90% of this was not charged (yes it was a big investment). Decent firms are there to help.

    So I would say that unexpected outcomes like those you described are often preventable if you partner up with a good accountant (not a cookie cutter tax sausage factory), spend a little more then you will gain a lot more.

    Something to consider. My two cents. Well done for bouncing back.

    Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900
    #1237938
    Paul – FS Concierge
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    @jamesmillar, you make an excellent point.

    I’m sure it is hard for soloists to bite the bullet on what they see as an Expense item but when it ends up costing them money in the long run, it becomes very much a false economy to not spend the money on good advice in the first place.

    #1237942
    James Millar
    Participant
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    @jamesmillar, you make an excellent point.

    I’m sure it is hard for soloists to bite the bullet on what they see as an Expense item but when it ends up costing them money in the long run, it becomes very much a false economy to not spend the money on good advice in the first place.

    Yes 100% – when you have a micro business it’s often hard to understand the benefits of having a great accountant (or the risk of having an ordinary one or no accountant). Without a clear value proposition it makes sense for businesses owners to shy away from expensive advisors. But there is no doubt in my mind that even micro businesses can benefit big time from good advisers. I mean if an accountant can’t save their client an amount equivalent to their annual fees or ideally many multiples of it then it’s fair to start looking at cost.

    Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900
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