SMEs END YEAR TAX TIPS

For Small and medium sized entities (SMEs)

A range of tax concessions are provided to small business entities (annual turnover less than $2 million). The following opportunities  End Year Tax Tips to reduce the current year tax liability should be given consideration by all SMEs before year end.

1.    Bad debts

Write off debt debts.

2.    Bonuses

Ensure all bonuses are quantified and documented before year end.

3.    Depreciation

Scrap obsolete items.
Utilise depreciation pools
Review immediate write off limits – the government announced its intention to reduce the instant asset write off threshold for small businesses to $1,000 effective 1 January 2014. However, the amending legislation has not received royal assent.

4.    Trading Stock

Closing stock can be valued at year end at the lesser of cost, market value or replacement value.
Generally, an entity must perform a stocktake to determine the physical quantity and value of each item at year end.

5.    Prepayments

Are there prepayments made that are referrable to a period of less than 12 months? If so, an immediate deduction may be available.

Xero accounting

End of financial year checklist

1. Complete your Bank Reconciliation for each of your bank accounts. You will know if you have any unreconciled items because the Reconcile Now button will be visible on the Dashboard.
2. Make sure you have all your Accounts Payable up-to-date. These should be coming in either by mail, email or as a Xero to Xero transaction, so check these are correct and entered into Xero via Accounts Payable.
3. Finish off your end-of-month billing. If you have any outstanding jobs that need to be billed, complete the invoices and send them off.
4. If you hold stock, complete a stock-take and let us know what the value of your stock was at year-end.
5. Finish your June expense claims for any business expenses paid personally.
6. Complete your June payroll and enter the payroll tax due for March but payable in April, as an Accounts Payable Invoice. If you use one of the payroll packages that integrate with Xero, then you only need to make sure you have finished the final June payrun.
7. Have at the ready any other documents such as investment statements, RWT certificates for interest, dividend statements, details of any new hire purchase arrangements or new loans and loan summaries from the banks. Scan these and email to acacia@itrqld.com.au.
8. Run an eye over your Profit and Loss. Go to Reports, select the Profit and Loss, select Compare Periods, change the date to June 2014 and change the Compare With to Previous 11 Periods. Look at each line and just make sure everything looks reasonable. Sometimes ‘strange’ items will jump out at you – drill down into the detail to fix.

If you’re not sure of any of the above you’ll find more about year-end here in the Help Centre.
Now, you’re ready to get in touch with ITR Business & tax Services and let us know you have Xero up-to-date and ready for  review. We will let you know if there is any other information we need from you.

Ask about our fixed price tax service. It’s ideal for tradies and sole operators.

Call now on 1300 829 489


Tradies Tax Guy - No Hassles Tax


Sign up for our FREE tax and business tips newsletter

Sign up now

Remote Support