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12 Tax Tips for Business Owners

- Friday, June 27, 2008
12 Tax Tips for End of Financial Year 2008

What will YOU do differently this End of Financial Year?

The end of the 2007/08 Financial Year is around the corner!! Many of us feel frustrated and overwhelmed during the period just before the 30th of June – there is so much to do.

Well, to make the most of Pre-Tax Time, Business Flair spoke to Daina into giving us her expert guidance to help you prepare your business’s financial assessment.

1. Tax Planning - before the end of the Financial Year, review your position – look at where you are business-wise. Consider allocating funds to Superannuation? Can you prepay expenses? Have a look at your income projections and expenses so you can work out your estimated taxable income.

2. Consider moving any allocating funds into your superannuation fund before the end of the financial year – this can reduce your tax debt.

3. Prepay interest on your loans or investments.

4. Plan for any staff bonuses – if you decide to pay staff bonuses, now is the best time to plan and implement this.

5. Think about acquiring the services of an accountant who knows tax law and can assist you with a variety of ways to legitimately reduce your tax liabilities.

6. Do you have stock in your business? If so, you’ll need to do a stocktake and have a closing stock figure.

7. Make sure you have your bookkeeping up to date – this ensures you will obtain a true picture of the financial position of your business (that means open all the mail, even though bills will be included, you’ll need to face the music)

8. Work with an accountant closely to get them to explain everything you need to know about the finances of your business – this is one of the most underestimated skills of business owners – it is critical to the understanding of exactly where your business is placed.

9. Cash flow assessment –knowing exactly where your business stands ensures you have a better control of business cash-flow. Remember, it is illegal to trade as insolvent which means you cannot pay the bills when they are due!

10. Separate business from personal finances – often small business owners make the mistake of going into business as a sole trader by mixing business with personal finance – you cannot really gauge a true cash flow idea of your business using this practice.

11. Look at any capital loss or gains that can be offset against each other for the previous years.

12. Finally, look at ways you can be better at bookkeeping which means obtaining good financial advice; you might require a cash injection for the business or an overdraft or credit card – get appropriate finance where you need it - remember, the interest is tax deductible.

David Carruthers is a credit representative (Credit Representative Number [400226]) of BLSSA Pty Ltd (Australian Credit Licence No. 391237).