End of financial year tax tips

With two months to go until the end of the 2013 financial year, it's time to start thinking about the deductions your business is eligible for and start getting your financial paperwork into shape. Here are 10 quick tips to follow for a stress-free EOFY.

  1. Meet your reporting deadlines to avoid penalties, in particular lodging your business activity statement for the June quarter 2013 by 28 July and your fringe benefits tax by 21 May.

  2. Get your records in order to help you better complete and lodge activity statements and your income tax return. Good record keeping will also help you work out your costs and profitability, demonstrate your financial position to lenders and manage your cash flow. Keeping adequate records is also a legal requirement and a failure to do so can result in penalties.

  3. Compare your current tax year against previous years to identify the positive and negative trends, re-evaluate your margins/loan terms, and compare the performance of your products/services, according to MYOB's Tim Reid.

  4. Claim your small business and general tax break if you're earning less than $2 million annually. This tax break provides an extra 50 per cent tax deduction of the cost of new tangible depreciating assets. Visit the ATO website  for more information.

  5. Claim the appropriate CGT concessions. These may refer to the 15-year asset exemption if you're 55+ years old and your business has owned an asset for at least 15 years; or the 50 per cent active asset reduction if you've owned an asset to run your business. You may also be able to claim the retirement exemption or CGT rollover (if you replace or improve your asset).

  6. Throw your worthless assets out and claim the instant asset write-off before 30 June. From this income year, the threshold has increased from $1000 to $6500, which means you can claim a deduction for a depreciating asset that costs less than $6500. You can also claim an accelerated deduction for motor vehicles bought in 2012-13.

  7. Use a registered tax agent and ensure they're registered with the Tax Practitioners Board (TPB). You can check their registration on the TPB website. A failure to use a qualified tax agent may mean they do not have professional indemnity insurance cover and may disqualify you from the protection available under penalty safe harbour provisions.

  8. Write off your bad debts before 30 June as you may be eligible to claim a GST credit and reduce your potential tax liability. Read more >>

  9. Home-based business deductions can include more than just the standard claims. They can include claiming a portion of your expenses relating to the are you use to operate your business, occuancy and running expenses. Occupancy expenses include rent, mortgage interest, council rates and house insurance premiums while running expenses include electricity and gas costs, mobile phone costs, depreciation of equipment/furniture, repair costs and cleaning costs. Read more >>

  10. Be wary of tax schemes that promise to legitimately reduce your tax or avoid paying tax. Such schemes  may not be legal or may be a scam, which could result in a massive tax bill and penalties.

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