Are you ready for tax time? Quick tips to help you this EOFY 2020
The end of the financial year is looming – it really is that time of year again. Tax time is always busy so we’re sharing a few quick tips to help you sail through lodgment season.
Some tax time tips…
Gather and sort your business records now, including cash, online, EFTPOS, bank statements, credit or debit card transactions covering:
- sales and other business income
- expenses you can claim as a business deduction such as staff wages, contractor expenses, operating expenses and business travel expenses.
If you changed your record keeping software during the year, check that all your information has transferred over correctly.
Are you a sole trader?
Even if your income is below the tax-free threshold, you still need to lodge a tax return.
Do you pay PAYG instalments? Lodge your activity statements and pay all your PAYG instalments before you lodge your tax return, so your income tax assessment takes into account the instalments you’ve paid throughout the year.
Are you a partnership?
If you operate your business in a partnership, the partnership lodges a partnership tax return, reporting the partnership’s net income (assessable income less allowable expenses and deductions)
As an individual partner, you report on your individual tax return:
- your share of any partnership net income or loss
- any other assessable income, such as salary and wages (shown on a Payment Summary), dividends and rental income.
The partnership doesn’t pay income tax on the income it earns. Instead, you and each of the partners pay tax on the share of net partnership income you receive.
Are you a trust?
If you operate your business through a trust, the trust reports its net income or loss (this is the trust’s income less expenses and deductions) and the trustee is required to lodge a trust tax return.
As a trust beneficiary, you report on your individual tax return any income you receive from the trust.
Are you a company?
If you operate your business through a company, you need to lodge a company tax return.
The company reports its taxable income, tax offsets and credits, PAYG instalments and the amount of tax it is liable to pay on that income or the amount that is refundable.
The company’s income is separate from your personal income.
Tip! Registered tax and BAS agents can help you with your tax.
NOT-SO-SMALL LIST OF SMALL BUSINESS CONCESSIONS
Here is a list of small business tax concessions that may be available to you.
- Lower company tax rate – 27% for 2019-20 and 26% for 2020-21
- Small business income tax offset – 8% rate for 2019-20 and 13% rate for 2020-21
- PAYG instalment concession
- Simplified depreciation rules – instant asset write-off
- Accelerated depreciation for primary producers
- Deductions for professional expenses for start-ups
- Immediate deductions for prepaid expenses
- Simplified trading stock rules
- Two-year amendment period
GST, BAS and excise
- Simpler BAS
- Accounting for GST on a cash basis
- Annual apportionment of GST input tax credits
- Paying GST by instalments
- Excise concession
Capital gains tax (CGT)
- Small business restructure rollover
- CGT 15-year asset exemption
- CGT 50% active asset reduction
- CGT Retirement exemption
- CGT Rollover
- Contributions of small business CGT concession amounts to your super fund
Fringe benefits tax (FBT)
- FBT car parking exemption
- FBT work-related devices exemption
- Superannuation clearing house
- Contributions of small business CGT concession amounts to your super fund.
Speak to our tax adviser to find out which concessions you can tap into. Proper tax planning and effective structuring enables you, your business and your family to legitimately minimise your tax burden and maximise returns.
This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek tax advice from your accountants at KMT Partners. Information is current at the date of issue and may change.
A Guide To Minimise Your Business Tax 2020
Here is our business tax minimisation guide available for you to download for FREE. This guide outlines strategies and tips to assist you with considering how to minimise your business tax.