Nobody wants to pay more tax than necessary, especially when they are running a business and need every cent to reinvest in their business to help it grow. With some careful planning you can easily reduce your tax bill, so here are our 5 top tax tips.
1. Keep good records
Knowing exactly how much you have generated in income and what your expenses are makes completing your tax returns far easier and less stressful. There are some great systems available that will help you maintain your financial records in a clear and accurate way. Alternatively, you can hire a bookkeeper for just a couple of hours a week to ensure that your numbers are accurate, thus making the process seamless. At BSN & Co we offer a discounted bookkeeping service which makes preparation of financial statements and tax returns easier and more efficient. Ask your accountant if they offer the same service.
2. Be charitable
Did you know that every donation over $2 you make to a registered charity is tax deductible? After you make any donation retain the receipt then, at tax time, add up all your receipts and claim the total as a tax deduction.
3. Marketing advantages
Many small businesses put off doing marketing as they either don’t have the budget or don’t think they need it. In today’s highly competitive world, marketing is essential if you want to persuade potential customers to choose your product or company over the hundreds of other competitors. Not only will marketing improve your bottom line, every cent you spend is tax deductible, reducing your overall tax liability.
4. Watch your spending
Spending for spending sake is not a good idea. While in some cases business purchases may reduce your tax bill, this can have an impact on your cash flow. However, if you do need new office equipment, new systems or a car for business purposes, buying them before the end of the tax year would be advantageous. Before undertaking any big purchases make sure you speak to your accountant. There are some great ways to structure your purchases to maximise possible deductions, so make sure you seek advice first to obtain a benefit.
5. Tax effective business structures
Many people don’t give much consideration to their business structure; they simply register for an ABN and off they go. This may be the right way to structure your business, however it’s always worth seeking professional advice. Some business structures offer you far more in terms of protection of your assets as well as a tax advantage. Some businesses that have high costs can receive a reimbursement of GST even if their business income is below the $75k threshhold where businesses are obliged to become registered.
Speak to one of the friendly and experienced staff members at BSN & Co today. We can help you identify how you can minimise your tax liability.