Not filing your tax returns, or making fraudulent claims is a crime under Australian Federal Law and the government has been cracking down harder on non-compliance in recent years.
Compiling tax returns can be time-consuming, frustrating and quite difficult if you do not know exactly what you are doing.
What many businesses also don’t know is that if you go through a certified tax agent, you can get an extension of up to seven months.
Apart from the benefits to cashflow of an extension, using a registered agent gives you peace of mind, knowing that everything has been done correctly and according to the law.
But even if you use a tax agent, you are ultimately responsible for ensuring the information in your return, including the deductions you claim, is correct.
You cannot transfer that responsibility to your agent so make sure you give them complete and accurate information.
Do you know what your lodgment dates are? This year’s deadline is 31 October. But did you know you that get an extension on your lodgment dates if you use a registered tax agent?
In some cases this can mean you have an additional 7 months to pay any tax.
Dexterous Group offers a one-stop-shop for company and trust income tax returns. We fastidiously vet the income tax returns process to ensure that all is in order and completed in good time.
Have the necessary paperwork at hand
There is nothing worse than compiling your tax returns, or booking a consultation with a tax expert if you do not have the necessary documents you need.
To claim a tax deduction in your tax returns you need to be able to show that you spent the money, what you spent it on, who the supplier was, and when the purchase occurred. Bank or credit card statements usually won’t contain this information.
The only time you don’t need these details is if record-keeping exceptions apply.
Keep copies of all invoices, receipts, investments, bank slips and anything else that you might require.
Know what you can claim for
You don’t need receipts for claims under $300 for work-related expenses, but you still must have spent the money and it must be related to earning your income, and you must be able to explain how you calculated your claim.
Many people try and over claim on items such as holidays, flights, clothes, subscriptions and more.
A registered tax agent will be able to guide you and make legitimate claims for tax deductions.
Know what concessions are available to your business and assess the appropriateness of these.
Cash flow permitting now is a great time to review your IT infrastructure or that need for a new motor vehicle for your business.
When did you last review your debtors ledger? Do you have aged debtors that are non-responsive and not worth chasing?
In order to claim an income tax deduction for any bad debts, these should be physically written off in the year you wish to claim so it’s an important consideration between now and 30 June.
Feeling charitable and been putting off making that donation?
A donation made to a Deductible Gift Recipient prior to 30 June will be deductible against your income and therefore reduce the amount of tax you pay.
As a sole trader you may want to think about making a personal superannuation contribution.
There are certain conditions that must be met and these are found here. This deduction will offset the income you’ve earned during the financial year.
Don’t make tax time a chore and depending on the size of your business you can very quickly assess these key areas raised.
No one enjoys getting a large tax bill (despite it meaning you’re making money). By addressing the above you are ensuring you’re in the best position as we approach year-end.
Take the stress out of tax time
If you want to be sure that your tax claims are justified and correct, our agents are here to help you.
You might also want to read this blog post about what businesses can claim back at tax time.