During tax season, it is quite normal to see business owners get drowned by numerous paper requirements. This is the time when most companies start considering and reviewing every possible entitlement or eligibility for any potential claim. When business taxes are prepared, most firms aim to lower tax payables so that profits will be bolstered.
Beware! Tax collectors are now more stringent when it comes to cracking down on tax evaders. Those companies with offshore assets or accounts are particularly advised to be more vigilant. If you think your business has activities or projects that may be considered illegitimate, you should immediately seek advice from the Australian Tax Office (ATO).
Business Tax Tips
Here are five helpful tips that could help you maximise your business taxes. Through these, you could possibly maximise your tax returns and prevent incurring any penalties.
1. Get rid of obsolete facility and machinery
You may be aiming to obtain an appropriate write-off for all obsolete objects in your business. To be able to do so, review your company’s asset register. You should always take necessary action every year before June 30, which is the usual deadline for business tax filing. Your asset register should always be updated so that every equipment, furnishing, or item disposed of or sold during the financial year could be effectively monitored.
2. Aim to obtain capital gains tax (CGT) concessions
Those would allow you to possibly lower your capital gain from any business asset by as much as 50%. If you intend to qualify for a high tax concession, make sure your business would satisfy basic requirements or conditions applied to CGT for small business concessions. As a cardinal rule, you may apply for all possible concessions that your business is entitled to until your capital gain is lowered significantly to nil.
3. Pay your employees’ superannuation contributions prior to June 30
Doing so would help make sure you are entitled to a deduction. As an employer, you should check if you have made accurate and timely superannuation contributions for every employee. It would be better if you would do this on a quarterly basis throughout each financial year to prevent incurring penalties like the Superannuation Guarantee Charge.
4. File a claim to obtain deduction for directors’ bonuses or fees
Intend to claim such deductions this fiscal year. Give notice to such directors about such payments. You need to provide them advice before the end of the fiscal tax year. If the payment would be made on or after July, this form of income could be declared in the next financial year.
5. Write off your bad debts
You may clam back tax credits if such debts have been outstanding for more than a year. Each debt should be brought to account possibly as accessible income. The debt should be written off before the end of the financial year.
You may coordinate with ATO for more tips and advice on how to maximise your business taxes.