Building and managing your own business requires hard work and focus on all aspects, including the financial side of things. Most business owners dodge the idea of accounting and taxation. However, it is undeniably a critical part of any business that must be thoroughly planned. So, how do you start with tax planning? Here are a few tips that small business owners can do to manage and reduce their taxes:
Software
Whether you have an in-house accounting staff or you’re still doing it yourself, these days everything is more streamlined with many accounting software programs on the market to help you in keeping track of your cash flow.
Document Trust Resolutions
If you have tracked how your income from the trust is distributed to the beneficiaries, you will need to have a Trustee’s Resolution signed before 30th of June each financial year.
Use the Right Investment Structures
This is the perfect time to review your business structure and existing assets. Check where your investments are held. Other structures have the advantage of getting capped tax rates.
Consider Income Protection Schemes
There are several income protections that you can invest in your business. It does not only secure your business but also your family in case something happens to you. Getting one of these schemes also gives you the stand to claim it as a tax deduction.
Finish a Stocktake
As you complete your stocktake, you will have a clear overview of your stocks. This way, you can identify the stocks that are already obsolete or damaged, which makes you less entitled to pay for its corresponding taxes.
Take Advantage Of Tax Rebates
Ever heard about tax rebates? Different rebates apply, depending on the business you have. These include educational rebates, medical expenses, or spouse super contributions. Make sure to check all the available tax rebates applicable to you.
Check ATO’s Watchlist
Every year, the Australia Taxation Office (ATO) lets business owners know the things they’re keeping an eye. So, you need to be extra careful on your tax return disclosures. They have a highly advanced technique that allows them to identify taxpayers who may have unmatched disclosures in terms of home office, transportation, and other expenses.
Update Logbooks and Records
As tedious as the job sounds, you should keep your logbooks and records updated. Making it a business habit will allow you to keep accurate details regarding your expenses. Also, the more detailed records you keep, the more deductions you can substantiate. This means you can pay less taxes. And if ever ATO should enquire about your tax returns, you would have documents ready to present.
Hire an Expert
Tax planning can be confusing for new business owners. Learning the terms and technicality will take much of their time that they would have less to focus on their business. Hiring an expert to do the job is a great way for any business owner to get back on their feet and get into major business operations. Eclipse Taxation & Business Services ensures your book work is done efficiently. Our team is packed with specialised taxation experts who know just what to do in complying to tax authorities while saving costs at the same time. Get started and contact the team today!
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