If EOFY and anything tax-related can seem stressful, you’re not alone – in fact, research by Xero found that around two thirds of small business leaders don’t fully understand a tax return.
“What we’re hearing from our Women in Focus community is that upskilling or getting a better understanding of your tax obligations and where you can make potential deductions, is both essential to running a business and empowering,” says Fiona McAuley, Head of CommBank Women in Focus.
Let’s take a look at where to start, some tips for staying on top of your tax requirements and setting your business up for a new financial year. And, whether you’re new at handling the tax requirements for your business or if you’re looking to make EOFY a smoother period, we’ve included links to some CommBank resources for whichever stage you’re at.
Assess your business’s finances
It can be helpful to conduct a quick financial health check of your business before you dive into mastering your tax return. You may already be very familiar with things like your cash flow and profit forecast, but in knowing you’ve thoroughly assessed the status of your finances, you can be more confident that you’re meeting your tax obligations.
Get familiar with your tax obligations
What you’re required to provide at tax time depends on your business type as well as a range of other factors. You’ll need to make sure you’ve registered your business for tax, keep certain records throughout the year, consider claiming deductions, and more – find out how in this guide to tax essentials for small businesses. For freelancers, there are also a few things you can do to make tax easier, like putting away a percentage of each job or invoice for tax purposes. For more support, explore the ATO’s free small business tax resources.
Prepare for the next financial year
As you wrap up one financial year with your tax return, calculating deductions and updating records, it’s a good time to start planning for the year ahead. While all these activities are fresh in your mind, consider setting up processes that will make this time next year easier for you. Check out these tips to set your business up for the new financial year – you’ll even notice some steps align with the financial health check of your business.
If you’re unsure about your tax obligations, make sure you speak to a professional. And remember, once you’re familiar with the process it should get easier to manage each year, especially if you stay on top of things like filing receipts and keeping logs of deductions.
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