A little forward planning now will help you with the coming End of Financial Year.
The 2016 – 2017 tax year is coming to a close on 30th June, which means it’s almost time to fill in tax returns and review finances for the year that was.
The best advice for any EOFY is to get ahead of the game by planning your approach. This gives you time for preparation, to gather documents and avoid a Failure to Lodge (FTL) penalty.
Below are some basic tips for individuals:
- Do you need to lodge tax return? If you’re not sure, check with this tool on the ATO’s website
- Leaving the country? If you’re an Australian resident for tax purposes and are leaving the country, you can lodge your tax return early
- The tax free threshold: in Australia is now $18,200. Take a look into the individual income tax rates here
- Claiming expenses: find out what expenses you can claim; keeping in mind that for expenses over $300 you will need proof of purchase
- Tax deductible expenses: consider making tax deductible expenses, such as giving to charity
- Salary sacrifice: to lower your taxable income rate, consider salary sacrificing into your superannuation
You can choose to either lodge your tax return yourself, or seek a professional to help you. They know the system and are particularly advisable for complicated tax situations.
To lodge your tax return yourself online you can use the myTax (for this you will need a myGov account). You can also lodge a paper return, although it will take longer to receive a refund.
Below are some basic tips for people who are self employed:
- Organise yourself: get your paperwork in order for your Income Tax Return. This will likely include a bank reconciliation form, a profit and loss statement and a general ledger report.
- Business Activity Statement (BAS): complete your BAS if your business is registered for GST.
- PAYG: provide your employees with their PAYG withholding payment summary annual report.
- Tax deductions: if you work from home you may claim equipment (such as a computer or printer), work related phone calls, and cleaning costs.
- Maximise your deductions: by paying off any business expenses before the EOFY. Small businesses can claim purchased assets costing up to $20,000
- Reconcile your receivables: chase up any unpaid invoices and write off any bad debts
- Tax deductible superannuation: claim a tax deduction for the superannuation you have paid to your employees this financial year (these contributions are only considered paid once they have reached the super fund account)
- Review your processes and set yourself up for the year to come: review your finances and accounting procedures, insurance policies and staff salaries and award rates
- Set your future financial goals: decide what you want to save from your income
Make sure you are up to date on any tax changes, and ensure that you and/ or your business is complying with the laws and regulations.
As always, we highly recommend contacting a professional for any questions you may have.