Financial management

5 tips to do EOFY right!

- June 13, 2024 3 MIN READ
EOFY tax time

Small businesses in Australia currently have a tax debt of over $24.3 billion with the Australian Taxation Office (ATO), a number that has been increasing, and indicates the challenges SMBs face with tax compliance, writes Chris Dahl, CEO, Pin Payments.

Unfortunately, confusion surrounding tax obligations can result in incorrect tax returns and a failure to meet deadlines, leading to financial penalties and cash flow issues.

With less than a month until the end of the financial year, now is the opportune time to get organised. Proper planning and strategic advice for EOFY can present opportunities for SMBs to make strategic decisions and plan for the year ahead.

Five tips to organise your EOFY

Work smart and get organised

Before diving into EOFY preparations, small business owners need to get their financial records in order. Collect and organise all relevant documents, such as receipts, invoices, bank statements, and employee payroll records. Utilise cloud-based accounting software to streamline your record-keeping process and ensure accuracy. If EOFY gives you ‘tax anxiety’ consider consulting a professional to help you. Alternatively, if you’re having trouble understanding what you need to do, visit and use their EOFY business checklist to prepare and work smarter.

Review deductible expenses

Evaluate your business expenses for the year and identify deductible items. Common deductions include office rent, utilities, insurance, marketing expenses and business travel costs. Review your inventory and consider writing off any obsolete or damaged goods. The ATO website provides more detailed information on deductible expenses for small businesses and the specific eligibility criteria or limits. However, if in doubt make sure you consult a qualified accountant to ensure you claim all applicable deductions and maximise your tax savings.

Claim small business tax breaks

Tax time is the perfect change to make the most of small business tax concessions. In Australia, the instant asset write-off allows businesses to immediately deduct the full value of eligible assets, including vehicles and equipment, up to a specified threshold. Additionally, consider the simplified depreciation rules and explore the possibility of pooling assets for accelerated depreciation. Other current provisions include loss carry back for eligible companies, small business skills and training boost and small business entity concessions.The small business technology investment boost, however, is no longer available.

Superannuation contributions

You must ensure you’ve met your superannuation obligations for your employees as a part of your tax obligations. Check that you have made the necessary super contributions for eligible employees and submit the payment before the deadline. By meeting these obligations, you not only comply with legal requirements but also provide financial security for your employees. Other options for the new financial year include offering salary sacrificing with staff, where staff forgo part of their pre-tax salary in exchange for increased superannuation contributions, as this can be beneficial for both the employee and the employer. Likewise, next year you might consider making additional contributions above the minimum Superannuation Guarantee (SG) amount, as this can be a great way to reward your employees and potentially reduce your company’s taxable income. However, as always, before doing so make sure you consult your tax expert.

Seek professional advice at EOFY

Navigating tax matters can be complex, especially for small business owners. Engaging the services of a qualified accountant or tax advisor can provide invaluable support and expertise. A professional can help you identify tax planning strategies, ensure compliance with relevant regulations, and offer advice tailored to your specific business needs.

As the EOFY approaches, small business owners should view this period as an opportunity to optimise their tax position and set a solid foundation for the future. Incorporating these EOFY tax tips will empower small business owners to make informed decisions, reduce tax burdens, and pave the way for future success.

This post first appeared on Kochie’s Business Builders. Read the original here.

Join the soloist movement. Whether you are new to Flying Solo or looking to grow your business, our membership options will help you attract more leads, grow your network and sharpen your business skills.  Sign up to our newsletter to get the latest news and advice straight to your inbox.

Now read this

Understanding transaction fees: A guide for business owners

Here’s why you need to upgrade your Flying Solo membership pronto!

  • Share your business journey in an exclusive member profile
  • Get free lifetime access to our Going It Alone digital course
  • Participate in members-only events and experiences
  • Boost your business’ visibility with a Directory listing

$149.95 + GST
Billed annually
  • Andrew Caska

    Caska IP Patent Attorneys

    'Flying Solo opened up so many doors for us - I honestly don't know where I'd be without it"