Whether you’re just starting out in business, or you’ve been your own boss for years, the end of the financial year (EOFY) can be a busy time.
To help you organise your financial records and find the paperwork you’ll need to pass onto your accountant, we’ve put together a handy EOFY checklist to help you.
Download our free EOFY checklist
Reporting government payments
Some government related business grants or support payments you have received need to be included in your tax return.
For sole traders that receive a taxable grant, include this as business income in your individual tax return.
For partnerships, trusts and companies that receive a taxable grant, report this as business income in your partnership or trust tax return, or income in your company tax return.
Visit the Australian Taxation Office (ATO) website for more information.
Other government payments
Visit the ATO website for a high-level summary of government payments and whether they should be included in your tax return.
Tip: If you had to pause or close your business, visit the ATO website for guidance on how to manage your tax obligations.
Instant asset write-off
You may be eligible to claim the instant asset write-off for the cost of an asset you have purchased for your business in the 2023-24 tax year.
Eligible small business owners can deduct up to $20,000 per business asset/resource for the 2023-24 tax year. These purchases must be installed and ready for use in your business between 1 July 2023 and 30 June 2024. The Government announced this measure as part of the 2023-24 Budget, however this measure is not yet law.
Ask staff to wait for information to be 'tax ready' before lodging
If you employ staff, the ATO recommends completing your end-of-financial-year Single Touch Payroll (STP) finalisation declaration by 14 July 2024 tax and super information on your employee's income statement can be pre-filled when they lodge their tax return.
Encourage your staff to wait for their income statement to be marked ‘tax ready’ before lodging their individual tax return. If they choose to lodge with ‘not tax ready’ information, they may need to amend their return if their income statement is later finalised with different amounts.
Visit the ATO website to find out more.
2022-23 Federal budget tax-related measures
Two new bonus deductions will be available for eligible small businesses.
The Small Business Technology Investment Boost will allow small businesses to claim an additional 20 per cent tax deduction to support the uptake of digital technology, helping them grow by investing in their digital operations.
The second boost, the Small Business Skills and Training Boost, will allow eligible small businesses an additional 20 per cent tax deduction to train new and existing employees. More information on how to claim the small business boosts is available on the ATO website.
Please note: these initiatives were announced as part of the 2022-23 Federal budget but are not yet law. If you are planning to claim for one or both of the boost programs, you can delay lodging your tax return until the law is enacted. Alternatively, you can lodge your return and claim a deduction under existing tax law for the technology investment or the skills and training expenditure. When the law is enacted, you can amend your return to claim the 20 per cent bonus deduction.
Tax record keeping requirements
As a business owner, you need to keep records of all of your financial transactions under Australian tax law. This includes documentation explaining how your income and expenses were calculated, as well as documents supporting these calculations and any other elections or choices you have made within your tax return/s.
For example, if you use your home internet for business purposes and plan to claim a portion of the cost on your tax return, you’ll need to have supporting documentation (such as a usage log and tax invoice) to support the percentage of the cost you are claiming through tax
It pays to be organised
While it can be tempting to put off completing your tax return, the sooner you know what your tax liability is, the better you can manage your cash flow. Check with your accountant for the tax due dates that apply to you.
Expand your tax knowledge
The more you learn about how tax impacts your business, and how to plan for it, the more you can make informed decisions throughout the year and at tax-time. If you’d like to learn more about managing your finances, register for one of our upcoming workshops.
Prepare for next financial year
Personal income tax rates and thresholds are changing from 1 July 2024. You’ll need to make sure you’re withholding the right amount of PAYGW tax from payments you make to your employees or other payees. Your STP accounting or payroll software, the ATO’s tax tables or tax withheld calculator will help you do this. Remember to use the new tax tables, or check that your STP enabled software has been updated with the new PAYGW rates after 1 July.
More information
Read the tax time toolkit on the ATO website for more information on tax time essentials, including a range of fact sheets on claiming expenses for home-based businesses, motor vehicles and travel.
For more information on your business and tax obligations, read our finance information and our tax time tips, including:
- expert tax tips
- tax planning tips for a bumper year ahead
- how to prepare for a downturn in your income.
- quick guide to tax deductions
You can also contact our free small business advisory service on 133 140.
