Tax time doesn’t have to be terrifying. Read this article for tax advice for small business owners to make your EOFY life easier — and grab yourself a free advice call with a down-to-earth, friendly, local financial expert…..
The New Financial Year is here, which also means it’s tax time (and we all have mixed feelings about that).
New beginnings bring new opportunities and there’s no better time than right now to sharpen up your tax-time skills.
Have a scroll through these local small business tax tips, and click through for more information if you need it. Or better yet, take up the offer for a free introductory call and get zero cost advice on the spot from a local financial expert right now. (Honestly, outsourcing financial stuff is a form of self-care for me).
Check in with your business structure
So much can change in our businesses within a single year. EOFY is a great time to check in with yourself, your partners and your accountant to see if your current business structure serves your needs best. Here’s the rundown:
- Sole Trader — Simplest, cheapest way to run your business. You are legally responsible for debts and losses. You can employ workers, but not yourself. You’ll report all your income in your individual tax return.
- Partnership — A group of people who share the income and losses between themselves. The partnership has its own TFN. You must show how all income, deductions and losses are distributed to partners.
- Company — A separate legal entity with its own income and assets; responsible for its own tax obligations. Company directors must have a Director ID.
- Trust — Another person or entity holds and manages the business for the benefit of its beneficiaries. The trustee manages the tax affairs.
The ATO shares all the details here
Rethink your record keeping
If you reach June 30 with every expense up to date, you’re doing just fine (that’s impressive) — but if tax time equals stress time, this is the year to get on top of your record keeping.
That’s not to say you should be expected to do it all manually, but there’s likely some way you can improve the process. You can go the human route by outsourcing your accounting — which we highly recommend, so you can focus on growing your business, rather than chasing after its every record. Book an introductory call to suss out how this local bookkeeper could help you.
Alternatively, you can try an automated accounting software like Xero or MYOB. The ATO app offers a free option if you are a sole trader. New habits can be hard to form but honestly, no better time to start than right now! Your future self will LOVE you for it.
Save money and stack profit
Boom! 5 rapid-fire tax tips to keep more profit in your small business:
- As small business owners, we’re all owed money at some point… and sometimes we won’t receive it. There’s a silver lining, though. If you ever have to write off debt, you can claim it as a tax deduction.
- Avoid spending on business assets solely for the sake of claiming tax deductions. Typically, you’ll find yourself spending one dollar to save 30 cents in tax; this is based on the most common business tax rate. Don’t get caught up in the thrill of tax write offs (if you can call it that). Invest only in what you need.
- There are simpler stock taking rules for small businesses. If your aggregated turnover is less than $10 million per year (we know Kingston is a bustling place, but it’s okay if you’re not raking in the millions) — AND you estimate the value of your trading stock has changed by no more than $5,000 during the year — you are not required to conduct a formal stocktake (woohoo). Read more about that here.
- Victorian small business owners are eligible for free advice from Business Victoria (we love a freebie). Check out this page to claim your free 45-minute session. They can help you plan small business finances, show you how to build a profitable local business.
- Don’t forget to claim your membership with Kingston Collective! Any subscription or membership fees related to your industry or business are able to be claimed at tax time as business expenses. QUICKY JOIN US NOW if you haven’t already!!
Step into your network
We’re more than just tax advice for small business owners. We’re also the whats-what of things to do in Kingston, Victoria — and your personal small business network of skills, support, and strength. Your success is our success. If you haven’t joined Kingston Collective yet, or haven’t shown your face at one of our inspiring, high-energy events, getting in on the action is the best move you’ll make for the new financial year. And remember, your membership with us is TAX DEDUCTIBLE =)
Join us as we team up to connect, collaborate, learn together, and laugh about the highs and lows the way only another Kingston local understands. Learn about getting involved here.
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*Article collaboration with Fusion Financial in Mentone. Offering local business owners zero cost advice on-the-spot on their first introductory call. Book a 15min call with Braden from Fusion Financial and let him know KC sent you.
