Small business tax checklist

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Tax checklist for small businesses

End of financial year is almost here and if you’re a small business owner, there’s a few things you should start getting in order to put you in good stead for lodging your tax return. 

Like many small business owners, there’s never enough hours in the day to get things done. Whether you’re a tradie or a freelancer, we can get you organised with your year-end tax planning. Follow our simple checklist and tax boosting tips to help you maximise your tax deductions.

Keep on top of your receipts

If you’re struggling to keep a record of your expense receipts, an easy way to save them all in one place is with a receipt app or via the ATO app. No more need for paper trails!

Tradies – what tax deductions can I claim?

Not sure what you can and can’t claim as a work related expense? Here are some of the common tax deductions:

  • Your uniform (should have a business logo) and any laundering costs 
  • Protective gear such as hi-vis vests, boots and safety glasses
  • Tools and equipment – can be purchased outright or leased
  • Equipment repairs
  • Sunscreen and sunglasses (if you work outdoors)
  • Work vehicle expenses
  • Work-related tablet/computer, internet and mobile phone expenses
  • Training courses, licenses and certifications (directly related to your work)
  • Union fees
  • Home office expenses (if applicable)
  • Travel and accommodation expenses (if working away from home)
  • Other expenses incurred in operating your business

 

Income documentation to consider when doing your tax returns:

  • Income earned from your business
  • Income earned from employment
  • Interest earned for the year
  • Any government payments/allowances
  • Dividend statements
  • Details of rental property income and expenses
  • Any other income earned

Freelancers – what tax deductions can I claim?

The life of a freelancer – you often work from home, which means you can claim some home office running expenses. The important thing is you need to have a designated office or space (such as a bedroom converted into an office) that isn’t shared by other people to maximise your expenses claim at tax time.

You can also claim:

  • Tools and equipment and any ongoing costs 
  • Depreciation over a number of years on tools and equipment costing more than $1,000.
  • Computer/laptop and internet expenses (% of business related use)
  • Mobile phone expenses (% of business related use)
  • Protective gear such as hard hats, gloves, hi-vis vests, aprons
  • Work related travel (estimation of kms if no logbook kept, otherwise logbook and all expense items)
  • Travel expenses (flights, taxis, public transport)
  • Accommodation costs if working away from home
  • Marketing expenses
  • Work related education/ training expenses
  • Other expenses incurred in operating your business

 

Income documentation to consider when doing your tax returns:

  • Income earned from your business
  • Income earned from employment
  • Interest earned for the year
  • Any government payments/allowances
  • Dividend statements
  • Details of rental property income
  • Any other income earned

Not sure if you can claim it?

Ask yourself the following:

  • Is it directly related to your work or required for your work?
  • Did you pay for it yourself?
  • Do you have a receipt, invoice or bank statement as proof of purchase?
  • Were you not reimbursed for the cost by anyone?

 

If you answer ‘yes’ to all the above then it’s possible you can claim it as a tax deduction.

Keep things strictly business

If you’re a sole trader, it’s a good idea to separate your personal and business finances with your own business bank account. Not only does the ATO need you to think of your business as separate to your own personal affairs , it also makes it easier to understand how your business is performing.

Move your accounting online

If you’re still recording all of your business transactions manually, why not simplify and streamline the process with digital bookkeeping software such as Xero. You can easily keep track of your financial information, which helps when it’s time to prepare your tax documents.

When in doubt, speak to an accountant

If you’re ever unsure about anything tax related, you don’t have to go it alone. Breathe Accounting can help you with your tax prep and EOFY accounting. Get in touch with us to find out more.

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