The end of financial year makes many of us shudder and frantically rush around looking for lost paperwork. Unless, of course, you're one of those blessed, incredibly organised people that never bury their heads in the sand and feel perfectly okay when July 1st comes around.
Thankfully this year there is a simpler BAS that's been introduced to make it easier to lodge. There's also a $20,000 instant asset write off -- but it's best to make sure you spend it on something that helps your business and not blow it all on something you don't need.
Consumer Advocate Christopher Zinn told HuffPost Australia his top tip at tax time is to try not to be stressed.
"If you're feeling stressed you'll make poor decisions. Unless you're very confident in your own abilities, find a good adviser you can trust. There are professionals to assist you and it can be worth investing in their advice," Zinn said.
Here are the top issues you need to be aware of:
You only need to report total sales, GST on sales and GST on purchases.
"This makes things easier, though it depends on an individual's setup. Some people use an accountant, so it could be a reduction of costs as the simpler BAS should give people the confidence to do it themselves. Usually, when tax time comes, I prefer to flick it to my accountant but now it's quite simple and can be done in fifteen minutes," Zinn said.
"The GST has been around for twenty years now and it's something everyone complains about, but anything that simplifies tax in terms of time and compliance is a good thing."
$20K instant asset write-off
If you have a turnover less than $10 million you can purchase assets costing less than $20,000 each for your business and you're able to deduct the full amount immediately from your income, reducing your tax burden for that year.
Jewellery designer Fairina Cheng told HuffPost Australia the $20,000 instant tax deduction allowed her to invest in jewellery equipment.
"It helps me work more productively and efficiently, so I'm no longer restricted by my tools. I also invested in a GoPro that has allowed me to create customised videos for my clients, showing exactly how their engagement and wedding pieces are made," Cheng said.
Christopher Zinn said now that the threshold is $20,000 it means business can buy an asset; ranging from a new laptop to a car.
"Previously, that had to be depreciated over a number of years and was more complex. But now it can be done instantly. So that's a simplification in terms of direct benefit and an instant write off to deduct the full amount against your income," Zinn said.
Tax Free Threshold:
Now the definition of small business turnover threshold has increased from $2 million to $10 million, many more people can reinvest in their business.
According to Zinn, this is a huge advantage.
"Ten million sounds a lot if you're a one-person band, but if you're a small business with a few employees, it's not hard to get to that threshold. Small business doesn't mean you have to be small in terms of a corner shop. You might only have one-three people, but turnover could be massive in terms of what they can leverage online and what they can access in terms of world markets as well," Zinn said.
Jennifer Fein from Youli Travel told HuffPost Australia her best advice it to always makes sure you pay the payroll and super before the end of June.
"I also recommend having a proper reconciliation process monthly. This means that end of year is much simpler. Using something like Xero or Quickbooks or MYOB is totally worth it," Fein said.
"Of course having a reliable Tax accountant is also critical. I had to make sure that mine had expertise in the R&D tax credit as well. Remember that if you are GST registered that the end of year can mean you are getting money back!"
Know what's available
Small businesses can log onto the government website that outlines all the changes they need to know about. If you're not running a small business and need some tax information you can find information here.
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