As the calendar moves closer to June 30, it’s important to make sure you have everything sorted when it comes to your finances. Whether it’s for business or personal income tax, you can streamline doing your taxes by making sure you include some fundamental documents. For small businesses, there are quite a few things that you’ll need to have so take a look at our checklist to make sure you’re ready to finish the financial year on a good note.
A key tenet of Australian law is that all taxpayers that own a business are required to maintain records of every financial transaction made related to your business throughout the year. While there are some obvious ones like invoices or receipts for work-related necessities, there are a few other types of documents that you might not think of straight away. Together these documents will give the Australian Tax Office (ATO) insight into how your business is running and, more importantly, how it should be assessed.
The important thing to remember is that you need to show every record of income, deductions, profits and losses. Even more important? You need to keep these records for 5 years after each financial year. If the ATO requests an audit a few years down the line and you are unable to prove something, you could be subject to a fine.
Before you sign off on another year, here are the things you will need to have on hand or ready to provide to the team at Accumulus:
This past financial year saw some exceptional circumstances and as a result, many businesses took on financial support from the government through the JobKeeper program and other grants. These measures will also need to be included in your EOFY checklist.
All records of JobKeeper payments are necessary. For businesses like those run by sole traders, these may be included as business income in your individual tax return. For other businesses like trusts or partnerships, as well as companies, JobKeeper is to be reported as business income in the relevant tax return type.
The other boost to business that is available to Australian businesses is the capacity to claim temporary full expensing. This means that some businesses can deduct depreciating assets related to the business, as long as they were first bought or implemented from October 6, 2020. They can claim temporary full expensing until June 30, 2022.
This is another way in which businesses can give themself a leg up after such a rough year. With this program, some corporate entities have the chance to get a refundable tax offset. This is made possible by choosing to carry-back tax losses made in the 2019-2020 and 2020-2021 financial years and balance it against tax paid in the 2018-2019 or 2019-2020 years.