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.
Running your own business? Here's a few more things to consider:
Make use of the new instant asset write-off threshold
As at 12 March 2020 the instant asset write-off threshold amount for each asset was increased to $150,000 (up from $30,000) and eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million)1. This means that if you purchase an asset (new or second-hand), you can claim a deduction for that asset used within your business, so make sure to add this task to your checklist. This instant asset write-off is especially important for those of you who are self-employed and rely on assets such as cars, tools.
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 2019–20 income year, you may be able to utilise tax offsets – so add this to your checklist to find out if you are eligible.
COVID-19 Cash stimulus
Through the Australian Taxation Office (ATO), the Government will provide tax-free cash flow boosts of between $20,000 and $100,000 to eligible businesses, delivered through credits in the activity statement system, when eligible businesses lodge their activity statements2. Read more about the small business cash boost here.
In March 2020, the ATO announced a series of administrative concessions to assist businesses affected by COVID-193. Click here to read more about the options available to assist businesses impacted by COVID-19.
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.
Last updated: 29 April 2020