If you haven’t yet made use of your accounting software to do the calculating of your taxes for you, then it’s time to do so.

As the end of financial year is fast getting closer, now is the time for small businesses to start getting their tax in order, using their small business accounting software, and to psych up in leveraging some law changes set to commence in the new financial year.

So, what are we going to do and prepare for the coming tax time?

Gather your financial documentations like receipts. Before starting calculating what you owe in business taxes, figure out first what you make and what you had spent in your business. This means that your business income and expenses must be sorted out and organized. Find and gather these records and organize them, ready to be used in preparing your taxes.

Find out what and how much your business deductions are. However, you should not be aggressive about your deductions that an audit could be triggered. But if you want to still save on your taxes, then, maximize your allowable deductions and credits. Please don’t forget to have a good backup documentation on all your deductions. Make sure that you have on hand the proper receipts or other paperwork that could back up any claims you make.

To learn more about your business deductions, read on a general overview of small business tax deductions or you can check a detailed look at business expenses from the IRS. Then be sure to make a review of this list of small-businesses deductions you don't want to miss.

According to Glenn Cosgrave of professional services firm Bates Cosgrave, starting from July 1, a write off 100 per cent from any asset acquired for less than $6500 can be made by small businesses, compared with assets of up to $1000 for the current financial year.

Small businesses are defined by the Australian Taxation Office as those with a total turnover of less than $2 million a year.

Cosgrave stated, “You might want to consider if you’re going to run around and buy things soon to check that it’s not going to disadvantage you.”

Additionally, for those businesses buying a motor vehicle, an immediate $5000 deduction can be received and claim the rest under normal depreciation rules.

Likewise, make sure to learn the expenses that you can claim. This could be in the form of donations, income protection and the cost of getting your tax done, which are claimable for everyone but other expenses can depend on what type of work you do. So, don’t forget to browse the tax office website (ato.gov.au). In this way, you can get an idea of what you might be able to claim. Make sure also you incur the cost before July 1.

These are just some of the things you should do. Though the end of the tax year is important, businesses should not leave everything to the last minute. Always be prepared.


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