ATO makes last-minute tax tips for small business
Up-to-date records and a range of tax concessions are some of the major items the Tax Office has advised small businesses to consider ahead of tax time.
In a tax tips guide for small business, ATO assistant commissioner Mathew Umina said keeping good records will help small businesses to complete and lodge their tax returns, manage cash flow, meet their tax obligations and understand how their business is doing.
“Small businesses need to keep records explaining all transactions that relate to their tax affairs containing enough information to calculate the income, expense and other amounts that must be reported in tax returns,” Mr Umina said.
In addition, the ATO noted the range of tax concessions that could help small businesses at tax time, including the $20,000 instant asset write-off that can be taken advantage of by small businesses using simplified depreciation rules.
The small business has to buy and install assets that cost less than $20,000 by 30 June 2018 in order to write off the business portion in a 2018 tax return.
Another example cited by the ATO is where small businesses don’t need to do a stocktake under simplified trading stock rules if the estimate of the difference between opening and closing trading stock is $5,000 or less.
“There are also concessions that allow new small businesses to claim an immediate deduction for start-up costs like professional, legal and accounting advice,” Mr Umina said.
The ATO also noted that most expenses incurred in running a business can be claimed as a deduction, including operating expenses, business travel expenses, home-based business costs and costs of employing people.
“When working out what business deductions to claim this tax time – it’s important to remember the three golden rules,” Mr Umina said.
“One – the money must have been spent for your business not yourself, two – if you use something for business and private purposes, you can only claim the portion that is related to your business, and three – you need a record to prove it.”