Tax-time Tips for Small Businesses

10 Ways to Minimise Your Small Business Tax Bill

Tax time…

Do those words make you cringe?

You are not alone. Some people would describe lodging their tax return as an unpleasant event…comparable to a dentist appointment or a visit from their mother-in-law. While individuals are often excited about that extra cash boost at tax time, many small business owners are stressed about the hefty tax bill they might incur. Fortunately, there are plenty of simple ways to reduce your small business tax bill – after all, every little bit counts! Our Whitson Dawson tax team are experts at helping small business owners navigate the minefield that is tax time. Bad debts, super, capital gains…we’ve got your back! Here are our top 10 tips to minimise your tax bill:

1. Keep records:
   

   Our first tip is simple. Keep records of any potential deductions you can claim throughout the year to help streamline the process at tax time. Even something as simple as an excel spreadsheet or a folder for your receipts will be a big help come July! Keep in mind – you can only claim costs you incur in running your business, you cannot claim private expenses.
   

2. Asset write-off:
   

   Eligible businesses may be able to claim the full cost of the taxable use portion of an asset, which may reduce your taxable income.

3. Bad debts:
   

   If you can show that a debt has been written off by 30 June, and it was originally income, you can claim a tax deduction for the bad debt.

4. Wages:
   

   If you have expenses owing including staff wages and bonuses, you can claim these as a deduction even if they are not paid by June 30, provided you are committed to paying them and the work has been performed before June 30.

5. Pay Super:
   

   Pay your staff superannuation before June 30 to receive a tax deduction and make sure you pay super for yourself.

6. Motor vehicle:
   

   Accurately claim back vehicle expenses by keeping a logbook for 12 weeks of the year. It is important to keep an accurate record of private and business travel.

7. Consumables:
   

   Get your deduction sooner on consumable items like stationery, computer and office supplies by purchasing these items before June 30.

8. Concessions:
   

   Take advantage of the small business concession and prepay expenses like loan interest, insurance premiums, rent and subscriptions before June 30 to receive a full tax deduction on your tax return.

9. Working from home:
   

   Do you operate a home-based business? While you can only claim deductions for the portion of your expenses that relate to running your business, you can claim things like; the costs of using a room, internet costs, depreciation on furniture or equipment and repair costs (for business items only). Talk to the Whitson Dawson tax team about whether using the fixed rate of 52 cents an hour or the new shortcut method is the best way to calculate your deductions accurately.

10. Stock:
    

    Assess your stock and inventory. Identify damaged or obsolete stock as this will impact the value of the trading stock and your profit margins.

We understand how busy this time of year is for small business owners. Tax time thrown on top of marketing, recruiting, managing stock – and of course life – is not always easy. At Whitson Dawson we consider it our job to make lodging your tax return a stress-free process and we even have fun while doing it! If you need assistance with your tax affairs, our friendly, professional team can help you lodge your income tax return, prepare tax-planning strategies for the next year and provide taxation advice on topics like capital gains tax and GST. Give us a call on (07) 4957 2985 or email business@whitsondawson.com.au Remember, tax time doesn’t have to be stressful!

Until next time,

Whitson Dawson – your local accounting experts