Tax time checklist for busy SMEs

The end of financial year can be a stressful time for small business owners and sole traders. To help, we’ve produced a free downloadable tax checklist that will help to keep you on track at tax time.*

Australian tax law requires tax payers to keep records of all financial transactions made during the year. These records must be kept for a minimum of five years, so embracing the process and getting organised is key.

Small business accountant Michelle Maynard urges business owners to speak with their accountant before June 30 to review your business performance for the year to date.

“This will allow your accountant to suggest tax saving strategies that you can implement prior to the end of the financial year,” the partner of Carbon accounting says.

Making sure you have cloud accounting software and electronic receipts will simplify tax time, she adds.

“Don’t put off completing the tasks that need your attention at the end of the financial year. The sooner you know your tax liability and have it paid, the better position you’ll be in to make the next financial year even better for your business,” Maynard says.

Mark Chapman, Director of Tax Communications with H&R Block Australia, adds that planning for tax time well before the end of the financial year can pay dividends later on. Small businesses should ensure books and records are up to date, he says.

“Make sure that bank accounts, debtors and creditors listings are all reconciled, that all your sales are recorded, and that you have the paperwork (such as receipts and invoices) to verify your deductions. If you do that, the process of preparing your accounts and lodging your taxes will be smoother and less stressful for both you and your accountant.”

Chapman also highlights the need to look beyond this tax time, adding that it’s a great opportunity for an overall financial health check, regardless of whether you’re a sole trader, or a small business with employees.

“Focusing on short term deadlines is obviously necessary, but set aside some time to speak to your accountant to assess longer term goals and what you need to do to meet them. That could include changing the structure of your business, assessing your succession plan and working out whether your super is on track for a comfortable retirement.”

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This advice is of a general nature and must not be relied on in place of professional advice. Please speak to your tax professional for advice tailored to your individual circumstances.

*Please refer to the Australian Tax Office website to confirm the requirements needed to submit your tax return.