Easy Tax has compiled so helpful tips to minimise the stress of running your business…

Running your own business can be very stressful and extremely time consuming. In fact sometimes you feel like you’re spending more time bookkeeping and updating accounts for your tax than you are running the actual business itself.

Despite this leaving your tax responsibilities as an after thought can not only get you in trouble if you do not keep adequate records or pay what is owed, but you may also end up paying far more than you should be. The following tax tips should help you stay in control of your business and keep hold of those much needed profits.

• Stay Consistent: We all know you can deduct legitimate work related expenses (aka things that cost money and are directly related to your work; such as travel) but after a while you might become lazy at doing the sums. Oh it was just a quick drive up the road, who cares? Oh I forgot to keep the receipt when I bought my client lunch, it doesn’t really matter. In this frame of mind you’ll eventually lose out. Stay consistent and deduct everything, so you get the income you deserve!
• Get Savvy: Lodging the tax return, keeping your accounts in order and doing the sums can be very daunting, but in today’s age it doesn’t have to be. There are tonnes of pre-made spreadsheets, software and websites that can do the hard work for you, as long as you key in the right data you’ll be set. Filing your tax return is easy by using E-tax at www.ato.gov.au.
• Donate to charity: What give away money? This is not strictly true, if you do the math and find out that you’ve only just fallen in to a higher tax bracket, it may work out cheaper if you make a donation to charity and end up back in the cheaper bracket, thus saving more money on tax than the cost of the donation.
• Depreciate: This old accounting trick bewilders many new business start-ups because A) it involves maths and B) the concept seems illegal. Well the math is easy and it isn’t illegal; just do it. When you buy something for your business like a laptop, it has value (the value you bought it), but after a while it becomes outdated, slow and less efficient costing you money because a much quicker machine would process your work faster. It will eventually conk out. Depreciation is simply working out the monetary value of its deterioration. This is done by estimating how long the asset will last (3 years is a good estimate for a brand new laptop. It may become outdated but it will still usually work fine) and then dividing the initial cost by that figure. E.G. You bought a $3,000 laptop, so its annual depreciation would be $1,000. That figure is tax deductible.
• Utilize Your Refund: This sounds silly, but utilizing your tax refunds can save you money if done smartly. Many get the money and spend it, put it in the bank or invest it, but you should pay of any debt first. A lot of people are happy to constantly let their credit card balance roll over, but you are paying interest on this. Loans and credit cards have interest of around 16% to 18%, so if you put your refund in the bank you’d only be making about 6% to 8%. In other words you could be paying more interest than you’re making without realising.

There are lots of other ways to get the best out of your tax. Just remember to keep it legitimate, because if they don’t get you now they may still get you later and paying a huge lump sum ten years from now isn’t fun.

Our Sydney accountants at Easy Tax Accountants and Tax Agents in Sydney provide ethical, innovative, proactive and constructive Sydney accounting services. Our experience enables us to deliver some of the best Sydney tax advice, preparation of tax returns and maximise deductions through to even lodging your tax return… all focused on achieving the maximum potential tax refunds. In particular, we provide LAFHA Australia specialist tax and accounting advice for expatriates, based locally or internationally.

Take advantage of our small business accounting services during which we will help you to refine your needs and consider an accounting and tax planning solution for you or your small business going forward… make an online enquiry today or call us on +61 2 9419 5322 and let us help you solve your accounting or tax problems.

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