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%).

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%).


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.

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.


 

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