With the end of the financial year rapidly approaching, I thought it would be a good time to go over some tips for small businesses to consider as the financial year closes.
If you’ve got some tips yourself, feel free to share them!
Income Tax Offsets
Got a small business pulling in less than $5 million a year? Here’s some good news for you. You’re in line for an income tax offset that could go up to a cool $1000, and you don’t even have to lift a finger to get it. The Australian Taxation Office (ATO) will do the heavy lifting, calculating the chunk of tax on your business income. But hey, just make sure your earnings record is spotless when you file your taxes. After they’ve crunched the numbers on your tax return, you’ll find your offset amount smiling back at you from your notice of assessment. Oh, and just to make sure, you’ll need to be a sole trader, be part of a partnership, or be pulling in business income from a trust to qualify for this nifty little perk.
Have you heard about the Temporary Full Expensing (TFE) depreciation incentive? Since October 6, 2020, it took over from the instant asset write-off and here’s the kicker, it has no cap on what you can write off. Now, to play in the TFE league, your business needs to be pulling in less than a hefty $5 billion. But there’s a twist for second-hand assets – they can only be written off if your business is on a smaller scale with an aggregated turnover under $50 million. So, it might be a good time to look at your assets and see what you can write off under this incentive! You can read more about that here
Did you know your small business could be sitting on a gold mine of tax benefits? If your turnover is less than $2 million, there’s a smorgasbord of tax perks waiting for you. We’re talking about sweet deals in areas like Capital Gains Tax, Goods and Services Tax, Income Tax, and even Fringe Benefits Tax. So, do yourself a favor, get clued up on what tax benefits your business could tap into. You wouldn’t want to miss out on these bonuses, would you? You can check if you’re eligible for these at the ATO website
Did you know that as a small business owner, you’re able to offset certain costs against your taxable income, thus reducing your overall tax obligation? These deductions can encompass direct monetary outlays, such as the cost of business supplies and services, as well as non-cash expenses like the depreciation of your business assets. As part of your EOFY preparations, it’s vital to ascertain which tax deductions you can claim - and just as importantly, to have the documentation in place to substantiate those claims. After all, maximizing your deductions means freeing up more capital that can be reinvested back into your business.
We here at okke are writing a series of guides on depreciation for different business types. If you’re interested in me letting you know when those are published, just drop a comment down below and I’ll tag you the moment they’re ready!