How a Small Business Owner Can Strategise Their Tax Affairs
Is tax time on the horizon? This usually means that the average small business owner is about to embark on a mad scramble to try and get their tax affairs in order. This is never a good way to approach tax liabilities, and if you find yourself in this situation, you may end up spending more than you should or putting a lot of strain on your cash flow. It's better to have a plan in place so that you can approach your tax liability strategically and take full advantage of any deductions or benefits that may be due so you save as much money for your business as possible.
Superannuation
For example, consider superannuation. As a self-employed person you may be overlooking some of your eligible allowances and not getting the right tax relief. Put as much into your superannuation as you're allowed under the legislation and make sure that you always adhere to the deadlines.
Early Payment
Sometimes you may be able to take advantage of early payment, especially if you have a particularly large bill sitting on your desk. If your cash flow will allow it, you can claim against this year's tax, but just make sure that you get any associated income in as soon as possible as well to keep the bank balance healthy.
One example here could be a significant training course that may spread out over the upcoming year. If you already have the bill, then you could pay it now and reduce your upcoming tax accordingly. The ATO allows you to do this as soon as you get the invoice, rather than paying it when you actually take part in the education.
Medical Costs
Some people may have accrued medical expenses during the previous period, and these may have taken those out-of-pocket payments above the threshold. Check to see if you're eligible, but you may be able to get a rebate against any outstanding tax. While you're thinking about health issues, do you have the right type of private health-insurance according to your earnings level? Just be careful, because if you don't conform, you may end up having to pay a surcharge.
Worth the Effort
These are just some of the ways that you can mitigate the pain when tax time rolls around. It's best if you work with an accounting professional at all times, however, just to make sure that you are abiding by the rules when you claim.
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