Top 7 Tips for a Stress-Free Tax Season

Tuesday, 15 Oct 2019

Taxes are a taxing exercise for small businesses in Melbourne as they need to get it right by claiming all the deductions and without making any errors. As soon as the tax season arrives, it brings along a lot of worry and apprehensions for business owners who don’t know how much to pay to the ATO.

Many challenges plague the tax filing process, such as misreporting of the total income or incomplete documents submitted as proof of transactions, etc. However, with the help of a professional bookkeeper in Melbourne, it is possible to get through the procedure without any hassles or mental tension.

They are qualified and trained to lodge the returns impeccably and know which tax concessions are applicable to your business. If you are concerned about the upcoming tax season, then hiring an experienced bookkeeper can resolve all your problems. Also, you can pay heed to these tips to keep stress at bay.

Let us take a look.

1. Hire A Bookkeeping Company

First things first – as stated above, you need to find a professional bookkeeper who will not only help you in filing taxes but also manage your finances. With a veteran by your side, the stress will fade away in minutes as all the responsibility is now on their capable shoulders.

A bookkeeper will assist you in planning your taxes and streamlining all the financial documents to be submitted while filing. They will take care of all the regulations and are aware of the appropriate concessions and deductions, which can save your precious money.

Thus there will be no errors related to calculations, which can cost you dearly. A trusted partner ensures accurate tax filing on the due date to avoid any problematic situations.

2. Put Your Records In Order

It goes without saying that you need to have your books in order to lodge the tax returns efficiently. Updated and organised records mean that you can meet your tax obligations with perfection. It also gives you an insight into the financial health of the company and its bottom line.

When your documents are efficiently managed, payroll management and super obligations become easier. Opting for cloud-based accounting software in Melbourne can help in keeping the documents structured and streamlined.

It will keep all the receipts and invoices safe, and you can retrieve them whenever required. A registered tax agent can make use of this data managed by the bookkeeper at the time of submission.

3. Take Advantage Of The Increased Asset Write-Off

In April 2019, the government decided to increase the instant asset write-off threshold to $30,000 so that the medium-sized business could also leverage the boost. The eligibility criterion was also shifted from businesses with annual revenue less than $10 million to those businesses which generated less than $50 million.

This has made another 22,000 businesses entitled for the program. It allows you to get an instant deduction for business assets in Melbourne that are priced under the threshold.

4. Keep Your Personal And Business Account Separate

This is the golden rule if you want to make sure your finances are managed perfectly so that you can easily fulfil the business activity statement reporting obligations in Melbourne. It saves a lot of time as mixed transactions and can take a toll on you when you sit down to separate them during the tax time.

It will also attach credibility to your business when you are dealing with clients and suppliers who are paying you money. When you need funding for your business, you will have to acquire a business account.

Thus it makes more sense to do it beforehand. Your bookkeeper can help you in resolving this issue and maintaining the distinction effectively.

5. Keep Track of Deadlines

The tax return deadline for small businesses is October 31, 2019, if the owner is filing it himself/herself. This is for the period of July 1, 2018 to June 30, 2019. However, if you hire a registered tax agent in Melbourne for the job, you can file it by May 15, 2020, but there are certain conditions attached to it.

To utilise the services of a tax agent, you must get registered with an agent by October 31. If you miss this deadline, then you will have to submit the return along with the penalty which will keep increasing with the delay.

6. Know What The ATO Is Focussing On

As stated on the official ATO website, the organisation focuses on three main areas – accurate reporting of all the income, records of business expenses that are being claimed for deduction and presenting personal expenses as business expenses.

So if you are using a vehicle or a machine for personal as well as business purposes in Melbourne, you can claim only that part of the expenditure for deduction which was incurred by the business.

For example, if you are running an e-commerce business from home, you cannot claim the entire electricity bill as a business expense. So let your bookkeeping company in Melbourne take charge of claiming the appropriate deductions.

7. Leverage The Income Tax Offset

If you are a sole trader or get a share of net small business income through a partnership or trust in Melbourne, then you can make use of the income tax offset. It can help you to reduce your tax bill by $1000 if your revenue is less than $5 million.

It can come handy for micro business owners who are struggling to find a foothold in the industry. You can consult your bookkeeper to inform you about the details of the small business income tax offset.

You should also know that the company tax rates have been changed. The full tax rate is 30% while the lower tax rate is 27.5% and is applicable to companies, corporate unit trusts and public trading trusts.

Conclusion

If you are a small business owner in Melbourne who is dreading the tax filing time, you are not alone. There are many who get nervous during the tax season. So pay attention to the tips mentioned above and the advice offered by your bookkeeper to get through the phase without any stress and pressure.

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