5 tax-minimising tips for small businesses
Date posted: Monday, November 10, 2014
How can a small business save on their tax? Well, returns for companies may not be due until February next year, but in our experience working with SBEs, there’s no such thing as getting on top of things too early or having too much help.
It’s no big secret that tax is one of the biggest worries for small business owners, so we’ve outlined our 5 top tips keep in mind when preparing your return.
- Pay your super early
Any superannuation you pay to your employees before June 30 can be deducted in that financial year – this is one of the best and easiest ways to reduce your tax bill. And don’t forget to contribute to your own super! Not only is it important to build up your own next egg, but super contributions are only taxed 15%, rather than the 45% income tax they would otherwise be slugged on.
- Delay your income
Another really simple way to help you at tax time is to defer income until the next financial year, so you don’t have to pay the tax on it this year. This means reviewing term deposit maturity dates or just delay sending out invoices until July.
- Get onto those tax concessions
As a small business (the legal definition by the way is an annual turnover of less than $2 million), there are a heap of special laws and exemptions that make life a bit easier for you, so it’s important you’re not missing out. They include GST and Capital Gains Tax concessions, deductions on interest payments and simplified depreciation rules – for example, did you know if you buy a business asset for less than $6,500 you can get it immediately written off on your tax? The more you know!
- Bulk buy your expenses
It’s a good idea to deck out the office with all your every day stationery, subscriptions and business expenses so you can claim their tax deductions this financial year, not next. It may not seem enough to be worth it, but have you seen the price of ink lately? All those little expenses add up and can make a huge difference on your tax bill.
- Bad debts? Write them off
If your cash flow’s been a bit under the weather, you might have a bad case of bad debts – i.e. clients that are behind on payments, or that may never even to be able to pay you. Such is life – but not all is lost. If you write these debts off now, they’ll become tax deductible and also reduce your taxable income.
So if you’re a small business who’s still wrangling with their 2013-14 return, stop stressing and give us a call – we’re here to make your tax time a regular walk in the park.