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How to Get Your Business Records Ready for Tax Time

Have you organised your end-of-financial year documents for your tax return? Organising your paperwork now means you can get your business tax return completed and receive any refund due or start planning for tax payments.

Getting your business records up to date and accurate has never been more important. It will allow us to work with you proactively to plan for the year, which will continue to be unusual for many businesses. When your business records in order, you can run your financial reports and understand what’s going on in your business. Check out our blog Why You Need to Understand Your Financial Reports to see how they can help you make sound business decisions.

Some tips to help you prepare for tax time:

Business Record Keeping

If you haven’t been tracking your business income and expenses, now it’s a good time to sort it out.

Accounting software like Xero will you automate your bank feeds, making it easier to track your income and expenses. This will save you time, so you can focus on growing your business.

You can also keep all your documents in one place. This means more accurate records and you can make the most of your tax deductions. Having your records in one place also means less going back and forth with your accountant.

If you work from home, make sure you keep records. You can either record your actual hours spent working at home or keep a diary for a representative four-week period to show your usual pattern of working at home.

Similarly, if you use your phone and internet for work, you need to keep a diary covering a representative four-week period itemising your work/business related calls and internet usage. Check out the ATO Record Keeping Guide and download our Home Office Calculator to record your hours and expenses.

Business Records You Need for your Tax Accountant

  • All business income, plus any income from JobKeeper, cash flow boost, and other COVID-19 or other disaster-related payments during the year.
  • If you receive income mainly from your personal skills or effort as an individual (for example IT consultants, medical practitioners, financial professionals, or construction workers), talk to us. We can help you determine if it’s Personal Services (PSI) income.
  • Have you taken out a new loan or other finance? You need to provide details of the finance arrangements and loan statements at 30 June.
  • Have you bought or sold assets? If so, you need full details of acquisitions and disposals.
  • Record any deposits or bonds paid or received.
  • Have you prepaid for insurance or other large business expenses? Make sure you provide the details, including the policy details, date and amount paid.
  • List any bad debts to be written off.
  • Review your debtors and creditors. Is the list current and correct?
  • If you operate your business through a company, there are rules for taking money out of your business or using its money or assets for private use. Talk to us to make sure it’s done correctly.
  • Let us know about any changes in contact details of business owners and key personnel.

There may be some other matters to discuss before completing your tax return, such as vehicle usage, capital gains, private usage apportionment, or superannuation.

This year, there may also be additional elements to discuss if you have received refunds, credits or deferral of business expenses and liabilities.

One key thing to remember is to keep all your business records securely and electronically, for safety and ease.

Once you have all your records organised, contact us to schedule your tax return for prompt lodgement.

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