There are many tax hacks which business owners can use throughout the financial year, to ensure they are prepared for tax time. These hacks will save you stress, time and money when it comes to the end of financial year.
Store all your invoices and receipts electronically
One way to do this is to use apps like Receipt Bank or Hubdoc that integrate with Xero so that you do not lose valuable deductions and records.
Keeping a diary record of your activities throughout the year, to track:
- Home office electricity – keep a record of the number of hours per week in order to claim the cents per hour method
- Keep records to apportion telephone internet usage
- Keep a diary of travel activities – to accurately apportion trips for business verse private use
Complete tax planning throughout the year
It is important to review your profit throughout the year and ensure that you are setting enough tax aside. This will prevent you from any surprises when it comes to the end of financial year. Further, paying yourself the correct wages or remuneration from your business will reduce the need for adjustments at the end of the year. Another great tax hack is to speak with your Accountant during the year if you aren’t sure on any aspect of how your business is running from a profitability perspective.
Set up a system to plan and manage your tax lodgements and debt payments
Something as simple as adding reminders into your calendar or mobile phone can help prevent late lodgement penalties or debt penalties. Keeping all important dates noted and setting reminders is a great way to keep up with all ATO obligations and compliance.
Some ATO important dates may want to set reminders for include:
- ATO Payment Plan instalment date (if applicable)
- PAYG instalments date
- BAS / IAS lodgement due dates
- Income Tax Payment Due Date
Follow these tips to ensure smooth sailing at end of financial year!