End of Financial Year can be a busy time, but it can also be the most productive time of the year for a lot of small businesses. Reconciling your businesses financial position can lead to positive changes for future planning and growth strategies.
Whether you do your own tax or use a registered tax agent. Before lodging, make sure you:
- sort your business records, such as bank statements and cash, online, EFTPOS and credit or debit card transactions, into income and expenses you can claim as a business deduction
- check if your expenses qualify for small business tax concessions, including the instant asset write-off or the accelerated depreciation,
- make digital copies of paper records and make a backup just in case.
While this EOFY might look different to most, its important to be aware of any additional small business tax concessions you may be eligible to take advantage of, including:
- Immediate deductions for prepaid expenses – if your turnover is less than $10 million and you've paid for expenses (such as rent, registration fees, insurance or advertising) before June 30 and these end in next financial year, you can claim them as deductions in this year’s tax return.
- Instant asset write-off – you can claim an immediate deduction for the business portion of the cost of an asset in the year its first used or installed ready for use. If you are unable to take advantage of the $150k Instant asset write-off this financial year, the deadline has recently been extended until Dec 31 2020.
- Accelerated depreciation for primary producers – if you're a primary producer, you can claim deductions for fodder storage assets, and fencing and water facilities.
- Simplified rules for trading stock – if the estimated difference between your 2019–20 opening and closing trading stock is $5,000 or less, you don’t need to do a stocktake. Just report the same amount for your opening and closing stock in your tax return.
- Deductions for professional expenses for start-ups – if your turnover is less than $10 million, you may be able to claim certain start-up expenses (such as professional, legal and accounting advice, and government fees and charges) as deductions in this year’s tax return.
Learn more about these concessions and others at Concessions at a glance, or speak to your accountant.