The last quarter of this financial year (2019-2020) has been stressful for all Australians. Since the COVID-19 situation took hold in March 2020, there has been little relief in way of stress for business owners and employees.
As we edge closer to June 30, we are also edging closer to tax time. There aren’t many people that enjoy completing a tax return, but you have to do it, so you may as well make it less stressful for yourself and try to get the best account for yourself.
Here are tips that tradespeople should consider when lodging their tax return:
- Claim tools and equipment
- (if acquired after 2 April 2019, before that the cost limit was $20,000 up to 29 January 2019 and $25,000 between 29 January 2019 and 2 April 2019).
- Much the same as the claim tools and equipment tip, vehicles purchased for the business can be claimed against the instant tax write-off limit. Provided the vehicle was under $30,000.
- Clean your storage space
- If your business is holding any obsolete, damaged or unusable materials, you can write off the cost before the year ends and claim it as a tax deduction
- Ensure you have the necessary records for any small business expense claims
- Keep track of all receipts in your accounting software to ensure you have the correct records for your business expense claims. This will save you heartache if you are audited by the ATO.
- Give yourself plenty of time to complete your tax return
- Many business owners will leave their tax return to the last minute. This is a problem because you not only stress about getting it completed but you may also miss out on any incentives you could have received.
- Export your invoices from FlatRateNOW
- By using FlatRateNOW to quote & invoice, you can easily access your invoices at any time. Head to the Invoice Section of FlatRateNOW Office and begin exporting the invoices you need.
- If you aren't sure, check out our easy to follow guide, "Exporting Invoices From FlatRateNOW."
It is important to note that the Federal Government increased the instant tax write-off threshold with the COVID-19 Business Stimulus Package in March/April 2020.
Accounts Connect have 2 very helpful tips for your Tax Return this Financial Year:
- Know the value of your depreciating assets
- Business are apply to accelerate there depreciation deductions provided eligible assets are acquired and first used or installed ready for use from 12 March 2020 until 30 June 2021.
- From 12 March 2020 until 30 June 2020, the instant asset write-off:
- threshold is $150,000 (up from $30,000)
- eligibility range covers businesses with an aggregated turnover of less than $500 million (up from $50 million).
- From 1 July 2020, the instant asset write-off will only be available for small businesses with a turnover of less than $10 million and the threshold will be $1,000.
- Write off Bad Debt
- If a customer owes you money, but is unlikely to pay, you can write off the bad debt. Bad debts are tax deductible and can be used to offset your taxable income.
Our only COVID-19 tip is to consult a professional.
These times are unprecedented to many Australian Business Owners and with some of the largest financial support packages in history currently being offered by our federal Government, it can be easy to get confused with what you should be providing to the ATO.
It can pay to consult a professional!
Disclaimer: FlatRateNOW is not a financial service profession company. The above tips have been sourced from professionals, consultants with the right certification to provide you advice or are factually available by the Australian Government and Australian Taxation Office. If you require advice, please consult a professional.