What your tax time checklist should include

It’s tax time again and this checklist can make completing your tax return a bit easier. We’ve also included some considerations for small businesses disrupted by COVID-19. As always, seeking professional advice is essential - whether it’s tax, accounting or financial advice, it can help prepare you for tax time this year and into the future.

Updated 27 May 2021

Go through your paperwork

Yep, there’s no avoiding the paperwork, so go ahead and put this on your list of things to do. Oh, you haven’t spent the time to get your paperwork in order since the last financial year? That’s completely fine, because there’s never a better time to get on top of it than now. We know it can be time consuming to begin with, but think of how cruisy your next tax return will feel once you sorted it out and have a system to keep it all in check.

Claim your deductions

It might seem like the most obvious of tasks to put on your checklist, but claiming all the deductions you are eligible for makes a huge difference to your tax return. It’s important to remember to be able to justify any expense you are claiming as a deduction. You’ll have to know how the claim was calculated if you are asked to show proof.

Tip: For the small business owners: As a small business owner, many expenses incurred in running your business can be claimed as a deduction (that’s a win). Deductions could include equipment, legal advice, rent and many more.

Speak to the experts

Please don’t make your tax time checklist without adding this task. There are plenty of experts around to help you out, so use them - whether it’s tax, accounting or financial advice.

Tip: For the small business owners: Something else to remember is to check that your insurances are up to date, especially if your circumstances have changed in the last year. Anything from renovating your premises, buying new equipment and adding more staff could mean you are not fully covered under your current insurance policy.For more information regarding why you should review your business insurances, read our article.

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Running your own business? Here's a few more things to consider:

Make use of the new instant asset write-off threshold

The instant asset write-off is especially important for those who are self-employed and rely on assets such as cars and tools. 

For assets first used or installed ready for use between 12 March 2020 until 30 June 2021, and purchased by 31 December 2020, the instant asset write-off the threshold amount for each asset is $150,000 (up from $30,000) and eligibility extends to businesses with an aggregated turnover of less than $500 million (up from $50 million).

From 7.30pm AEDT on 6 October 2020 until 30 June 2022, temporary full expensing allows a deduction for:1

  1. The business portion of the cost of new eligible depreciating assets for businesses with an aggregated turnover under $5 billion or for corporate tax entities that satisfy the alternative test
  2. the business portion of the cost of eligible second-hand assets for businesses with an aggregated turnover under $50 million
  3. the balance of a small business pool at the end of each income year in this period for businesses with an aggregated turnover under $10 million.

If you purchase an asset (new or second-hand), you may be able to claim a deduction for that asset used within your business, so make sure to add this task to your checklist. Click here to read more.

Utilise the small business income tax offset

If you are running a small business as a sole trader and have a turnover of less than $5 million for the 2021–222 income year, you may be able to utilise tax offsets – so add this to your checklist. To find out if you are eligible and for further information visit ato.gov.au.3

For the most up to date information on what's new for small businesses visit ato.gov.au. 

The end of the financial year is a busy period and when you add COVID-19 into the mix, getting expert advice has never been more essential. If you have any questions about your financial situation, speak to your local Mortgage Choice expert, today. 

Posted in: Small business


1. https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/#:~:text=threshold%20amount%20for%20each%20asset,(up%20from%20%2450%20million).
2. https://www.ato.gov.au/business/income-and-deductions-for-business/in-detail/small-business-income-tax-offset/
3. https://www.ato.gov.au/business/income-and-deductions-for-business/in-detail/small-business-income-tax-offset/