As the financial year approaches, Australian business owners often face unexpected tax challenges beyond typical record-keeping.
We’ve put together our top five tips to help you conquer tax time, but we’ve skipped the obvious stuff and focused on the often overlooked aspects of EOFY.
Firstly, misclassifying private versus business expenses is a common pitfall. Many businesses inadvertently claim personal costs as business deductions or fail to account for private use of business assets, risking ATO scrutiny and penalties.
Secondly, ineffective management of bad debts means many businesses miss valuable deductions. Without proper documentation and demonstrated recovery efforts, genuinely unrecoverable invoices can’t be claimed, increasing taxable income.
Thirdly, underestimating or incorrectly calculating PAYG instalments can lead to significant year-end tax bills or tie up vital cash flow. Mismanaging these prepayments, especially with fluctuating income, creates unexpected financial pressure.
A fourth, often overlooked issue is navigating the complexities of Capital Gains Tax (CGT) and its concessions. Businesses frequently miss out on substantial tax relief when selling assets or restructuring due to a lack of awareness of specific conditions or inadequate record-keeping.
Finally, businesses often struggle with failing to plan for succession or major changes from a tax perspective. Significant events like new partnerships or sales, without foresight, can trigger unexpected tax liabilities or forego favourable treatments.
Our team is here to support you and your business in many different ways, give us a call on 1800 668 225 or reply to this email by clicking here to ask us any questions.
Have you had a mentoring session? Click here to book now.
