Set yourself up for success this new financial year

Set yourself up for success this new financial year

Whilst 1 July doesn’t hold quite the same excitement as new years day, it’s a great time to reflect on your business processes and take the time to assess your business tax management. We have put together some tips and tricks to make the process immensely easier, more efficient and relatively painless – who would have thought!

Check your deductions

Documenting your taxable deductions throughout the year is a good habit to get into. Working out what business deductions you can claim at tax time will be easier if you remember the three golden rules; the money must have been spent for your business not yourself, if you use something for business and private purposes, you can only claim the portion that is related to your business and finally; you need a record to prove it. Which brings us to our next point.

Get the app

Many of us try our best to keep track of our taxable expenses but often our best intentions fall to the wayside and we’re left once again trying to make sense of all those receipts come tax time. While there are many ways you can track your receipts we find that the ATO’s myDeductions app is a handy way to keep on top of it all. The tool allows you to record deductions including work-related expenses, gifts and donations, interest and dividends. It also lets you store photos of receipts and record car trips as you go. The myDeductions app can be used by individuals and sole traders (sole traders can use it to keep track of business income) and then at tax time you can simply send a summary of your deductions to your accountant. Trust us, they’ll thank you for it!

Find out if changes apply to you

There were a few changes that were applied from 1 July this year that you may need to be aware of. One of the key changes is that taxpayers are no longer able to claim any deductions for the cost of travel incurred relating to the maintenance of a residential rental property.  Another significant change for employers, with 20 or more employees, is that they are now required to start reporting through Single Touch Payroll (unless your payroll software provider has been granted a deferral or you have been granted an exemption by the ATO). If you are unsure about how Single Touch Payroll might impact you or you have questions in relation to other changes you should always talk to your accountant.

Move online – save time and trees

The myDeductions app will help reduce all that tax-time paperwork and your mountain of receipts which is a great step in the online direction – but why stop there? Another step further to streamlining your processed online, which helps save time (and trees), is to take advantage of online banking and accounting tools which help keep track of tax-related expenses. Some accounting software even allows you to synchronise your bank account feeds, so you won’t need to manually reconcile your bank transactions. Not only is it often more efficient to house everything online it is also a great way to back up all your electronic records through a cloud service (such as MYOB). In addition to safe-guarding your records housing everything online will also mean you can easily share information come tax time with any business partners and your accountant.