Whether business or personal, everyone should be doing this in some capacity. Tracking your income and expenses makes tax preparation and filing so much easier for you and your accountant. To file your taxes, your accountant needs an up-to-date balance sheet (businesses), an income statement, and a record of capital-asset activities for the year (buying, or selling of assets).
2. Receipts and records
Record keeping is the number one priority anyone should have regarding expenses. It doesn’t matter if you keep your receipts organised in a shoebox or online, your accountant will thank you.
Protip: Reduce the clutter by choosing software that allows you to upload and store your receipts.
3. More than just receipts
Sometimes a receipt just isn’t enough. I know, it hurts to hear but it’s the truth! Providing fuel receipts for the use of your personal car won’t cut it. You need more information to back your deduction. The most effective way is to create a log. Track your km’s based on business vs. personal. The ATO won’t accept deductions for personal use, so make sure you make it clear how far you drove for business reasons.
Protip: Driving to and from work is NOT deductible
Business expenses must be ordinary (accepted within your trade) and necessary. It’s also important to separate personal and business expenses, capital expenses, and any expenses related to the selling of goods (cost of goods sold).
5. Tax strategy
Tax-deductible business expenses are a great way for small businesses to reduce their tax liability. This is especially helpful for companies that are aggressively spending in order to expand. These reasons (and many more) are why tax strategies are so paramount for your business. This is why you need to choose a trustworthy and effective business advisor.
Whether you’re clambering to make your 2017 tax deadline or you’re just not sure what expenses you can deduct, you’ll need an accountant that understands your business and its year-long activities.
To speak to someone who will happily get to know you and your business, call RA Business Advisors on 07 3367 0852 and speak about your tax woes today!