Top tax tips for SMEs and PAYGs

With the end of the financial year just around the corner, now is the perfect time to think about your tax and what you can do to give your tax refund a much needed boost. We’ve highlighted the five top tax tips for both small business owners and pay as you go employees.

Top 5 for PAYG employees

1

Know what you can claim

As a PAYG employee, you may be able to claim deductions
for a range of expenses, most of which directly relate to your
income. Some of the expenses you can possibly claim include:
vehicle and travel expenses, clothing and dry-cleaning
expenses, charitable donations, home office expenses and
self-education expenses. The rules for deductions are very
complex and restrictive, so take this as a rough guide only.

2

Keep your receipts

It’s important for you to keep a record (receipts) of the
various purchases/expenses you plan to claim, so make sure
you have a good filing system in place.

3

Get your insurance in order

Singles who earn over $90,000 a year, without private
hospital insurance, may be charged a Medicare Levy
Surcharge. Depending on how much you earn, the Medicare
Levy Surcharge could cost you thousands of dollars each
year, so get your insurance in order.

4

Rental property claims

If you have a rental property, it's possible to claim
appropriate capital works and capital allowances
(depreciation) deductions. Your accountant can identify
what you can claim as a property investor.

5

Salary sacrificed superannuation contributions

Salary sacrificed super contributions offer a simple way to
save on tax and build wealth. It involves having part of your
before-tax salary paid into your super rather than taking the
money as cash in hand. These contributions are taxed at 15%,
which is likely to be below your marginal tax rate (which
could be as high as 46.5%).

Beware: phishing scams

 

While it’s important to do what you can to ensure you maximise your tax refund this year, it's also imperative that you keep your eyes peeled for tax phishing scams. These days, phishing scams are more sophisticated than ever before, with scammers creating websites and forms that mimic something you may receive from the Australian Tax Office (ATO). To successfully avoid phishing scams, it’s important to know the tell-tale signs of a scam. In a nutshell, the ATO will not ask you over email to disclose your credit card details or other personal information. So, if you receive an email asking you to divulge personal information, delete it immediately and then contact the ATO
to let them know what has happened. You should treat all emails regarding your tax position
(except those sent by a reputable source, like your accountant) as suspicious.
It’s also important to keep your computer secure. Update your firewall and antivirus software on a regular basis to make sure you and your personal details are protected. 

Top 5 tax tips for SMEs

1

Maximise asset write-off

Businesses with an annual turnover of less than $2 million
are entitled to immediately write-off depreciating assets
that cost less than $20,000 each, as long as those assets are
bought before 30 June 2017. If you are yet to take advantage
of this business incentive, speak to your broker today about
your asset and equipment finance needs.

2

Take advantage of all deductions

Some of the more common tax deductions you should take
advantage of include: office maintenance and repairs, home
office expenses, vehicle and other travel expenses and office
running costs such as gas, electricity, wages and utilities.

3

Speak to a professional

Using a professional to complete your tax return can make a
huge difference to you, your business and your bottom line.
Not only will a professional accountant know exactly what
you can and cannot claim, but they will ensure your tax
return is submitted on time.

4

Rental property claims

If you have a rental property, it's possible to claim
appropriate capital works and capital allowances
(depreciation) deductions. Your accountant can identify
what you can claim as a property investor.

5

Salary sacrificed superannuation contributions

Salary sacrificed super contributions offer a simple way to
save on tax and build wealth. It involves having part of your
before-tax salary paid into your super rather than taking the
money as cash in hand. These contributions are taxed at 15%,
which is likely to be below your marginal tax rate (which
could be as high as 46.5%).