Now that the End of Financial Year is here, we put together a list of important things business owners should do to avoid cramming up during this season. We have included key changes that will affect your EOFY preparations and tax lodgment.
10 EOFY Tasks for Business Owners
Check in with your bookkeeper about what they need from you
This is the best time to work closely with your bookkeeper and identify the information they need from you. Good record-keeping habits speed up the process of preparing documents you need for ATO compliance.
Identify your tax deduction and concession claims
You may claim deductions for most business expenses if they are directly related to earning your income. Remember that you must record these expenses as proof when claiming business deductions. Some of the business expenses where you can claim deductions include:
- Setting up a website
- Motor vehicle expenses
- Travel expenses
- Machinery, tools, or computers
Stay up-to-date with tax changes
It is important to ask your tax agent if there are tax changes that will affect your business. These may include changes in tax law and deductions or concessions. You can also visit the ATO website to stay up-to-date.
Back up all your records
Consider making digital copies of your paper records so you always have back up records. Whenever you can, keep electronic records of your tax receipts for the last 5 years from the date of lodgment. You can use these records when you are making deduction claims, acquiring or disposing of an asset, or having a dispute with the ATO.
Review bad debts you can write off
Go through your outstanding receivables and see if there are bad debts you can write off. It is best to review bad debts with your bookkeeper or accountant, as they can provide you with solutions to avoid bad debts from occurring in the future.
Report payments to contractors
If you make payments to contractors, you may need to report and lodge a Taxable Payments Annual Report (TPAR) by 28 August. Payments to contractors include:
- Independent contractors
Visit the ATO website to know more about TPAR lodgment.
Pay Super contributions before 21 June
Make sure that you make payments for all Super contributions before 21 June to claim the full deduction. Be aware of the following Super changes that will take effect on 1 July 2022:
- Employers with workers under 18 years are required to pay super if they work more than 30 hours per week
- If you have employees earning less than $450 per month, you will now make SG contributions
- The SG contribution rate will increase to 10.5%
Review your finances
Review if you have met your business targets for the year. Identify if there are adjustments you need to make in the next financial year. It is a good idea to review your finances with your accountant or bookkeeper. Seek advice on how you can improve your finances.
Lodge your taxes on time
Prepare all important documents and reports you need for your tax lodgment early. Take note of the due dates so you won’t miss them and avoid penalties. Remember that planning is the key to your compliance with the ATO.
Prepare for the new financial year
Take a look at your business process and see if there are areas you can improve. You may need to discard old practices that become a bottleneck to your business strategies. Planning and strategising help you lessen the stress and have a smooth business flow.
Need help from a qualified bookkeeper?
Focus Bookkeeping is here to help!
Contact us today for a free discussion with Fabiana Silva, a registered Bookkeeper and BAS agent.