EOFY is just around the corner, so business owners beware. If you haven’t gotten it done, there is still some time left! If you’re a start-up founder, then pay extra close attention as I guide you step by step into your first business EOFY.
Step 1. Get your ducks in a row
Getting your documents in order is absolutely crucial when that panic sticking EOFY rolls around. If you don’t know what your number looks like it’s hard to make a plan on what to do. As we keep telling you, we are XERO experts and we believe in most circumstances that is the best place to get your business numbers sorted. For a start-up, there may be more cost-effective options to get you going and we can guide you through that decision.
Step 2. Seek expert advice
Many problems arise when tax time comes around; the biggest one is lack of understanding. That’s why our taxperts (link) are well versed in all the laws regarding tax. We provide both taxation and business advice to arm you with all the knowledge you need. Penalties apply if your business isn’t compliant with legislation, so avoid unnecessary fees by talking to one of our advisors today!
Step 3. Claiming is the game
Small businesses that purchase new assets under $20,000 are eligible for a tax write-off to the full value of those purchases. Traditionally, you’d have to wait potentially say five years to realise this return but thankfully this upfront deduction has been extended. One catch: the assets must be purchased prior to EOFY and businesses cannot write-off expenditure that they are trying to also claim through an R&D tax incentive. Other deductions such as superannuation contributions (new rules this year) can also make a big difference to your tax bill.
Step 4. Be aware
Tax rule changes are as frequent as Christmas these days, no matter what they change every year. It’s critical that you stay up to date with these changes. Last year the tax rate for small companies dropped from 30% where it had been stuck for quite some time. This year the rate is 27.5% for businesses earning under $10 million and 30% for businesses earning more.
Step 5. Arm yourself
Before the technological age really took off, owning a small business was a living nightmare. Thankfully the ATO has kept up with the times by offering an endless supply of small business administration information. Or if you’re really a tech head, there’s an app for that. Check out the ATO website for information ranging from start-ups to large businesses. There is also a huge array of clever apps on the market that can help streamline your business and free up your time for the more important things in life.