Top 5 Year-end Tax Reducing Tips!
Here’s five of our best tips and tricks for how we can work with you to make sure you are maximising your tax deductions to minimise your income tax bill…
ONE... Check your assets!
From customer receivables to fixed assets, these need to be checked at the end of each financial year. Why??
- Receivables from clients – These are invoices that you’ve issued during the financial year that haven’t been paid yet. If you don’t expect your customers to pay then we can write off the amount they owe you as a bad debt and it’s fully tax deductible! Tax may have been paid on the sale in previous years but if you’re never going to receive the money then you’ve paid too much tax – let us get that back for you!
- Fixed Assets – We all know how easy it is to break or misplace things. That’s why it’s so important to go over your fixed assets every year and ensure they are all still in use. If they're not, we can write off their value which will increase your ‘paper expenses’ and reduce your tax! So be sure to check that your asset schedule doesn’t still include that drill that fell off the roof, the old laptop that the kids fried when they spilt their juice on it or the old phone that was left on the car roof and run over.
You also need to be sure that all assets are claimed! If you’ve purchased an asset that’s not on the list then we’ll need the info so we can claim the depreciation on this and the GST if applicable! We’re all about maximising your claim to minimise the tax!
TWO... Check your liabilities!
Loan amounts, Accounts Payables, the lot!
- Accounts Payable – These are invoices that were dated prior to the end of your financial year (most common being 31 March) but paid after the end of your financial year. This will include things like supplier invoices, electricity, and internet etc. If the expense isn’t recorded in your accounting system and you don’t tell us about it then we can’t claim them as a tax deduction! So be sure to include details on any amounts you owe so we can better your tax position
- Loans & HP’s – Be sure to give us any business loan and HP details at the end of your financial year, we can claim the interest you’ve paid on these as a tax deduction!
THREE... Check your home expenses!
You may be entitled to claim a deduction of expenses such as mortgage interest, rent, rates, insurance, electricity, repairs & maintenance etc if part of your home is used as an office for the business. So keep track of these bills and the size of the space you use and we’ll use the information to stake a claim!
FOUR... Check your personal belongings!
Often in business (especially in the beginning), you personally own tools or hardware that are used for business purposes that we can claim as a deduction (we may be able to claim the GST too). So, if you’ve owned that ladder forever and just attached it to the van, tell us! Started using your personal vehicle for business but not claiming any of the related expenses? Tell us! If there’s anything that is used for the business that hasn’t been claimed on because you’ve just owned it for yonks – tell us! We’ll let you know if it’s beneficial to bring it into the business to reduce your tax.
FIVE... Fill out our Annual Questionnaire!
Unfortunately, we don’t know what we don’t know! So we need you to give us all the information. What we do know is it’s boring bookwork that you don’t want to do! If we could do this for you, we would. But it’s important that you fill this in to the best of your ability with as much information as possible as this is where we get what we need to maximise your opportunities to reduce your tax bill. The questions are designed to give us the required information we need to get your taxes right. Attachments and detailed answers will reduce our follow up questions that we know you just love! We need this completed before we can start work on your Annual Financial Statements so if you want your work done asap, we suggest you do the questionnaire asap!
