For Australian entrepreneurs, every 30 June marks the end of financial year small business. They must prepare their end of financial year checklist for small business before filing their tax returns. Every year, it’s a busy and frenetic period for these hard-working individuals.
Bookkeeping can become daunting for small business owners. They must prioritise this task while juggling other priorities. They must organise their finances accordingly to ensure their business’s long-term success.
If a small business owner fails to lodge his tax returns with the Australian Taxation Office (ATO) on time, the latter can impose hefty fines and penalties. These penalties can significantly impact your business’s financial health and add unnecessary stress. It’s crucial to meet ATO deadlines to avoid these hassles.
This blog will explain small business EOFY checklist requirements to help entrepreneurs organise their annual financial obligations with the Australian government.
EOFY Checklist for Businesses
Your end of financial year checklist for small business that comply with ATO requirements will depend on your entrepreneurial setup. For instance, sole traders have different financial obligations than trusts and companies.
The following subsections serve as an EOFY checklist for businesses before 30 June every year.
Determine Tax Deduction Claims
You can claim specific amounts as deductions for operating costs directly associated with your small business. Entrepreneurs must familiarise themselves with claims for business-related deductions before filing their tax returns with the ATO. These claims include the following:
- Home office claims
- Travel or motor vehicle costs
- Tools, machines, or equipment
- Computers, IT, and miscellaneous infrastructure
Small business owners must provide evidence to support their claims with the ATO.
Annual Income Tax Return Filing
All business structures must file an annual tax return with the Australian Taxation Office. This process involves gathering all your financial records, filling out the necessary forms, and submitting them to the ATO. Whether you work as a sole trader or run a thriving company, lodging your tax returns on time is crucial to ATO compliance.
The ATO imposes deadlines depending on the business structure. The government also has different deadlines for business owners who file tax returns and hire a tax professional.
Pay As You Go (PAYG) Withholding Lodgement
Businesses must withhold taxes from the following:
- Employees
- Directors
- Certain contractors in voluntary agreement scenarios
- Businesses that don’t disclose their Australian Business Number (ABN)
Your tax filing and payment duties depend on your annual withheld tax. Withholding $25,000 or less entitles business wonders to quarterly payment of that withheld tax amount. They can also indicate their withholding tax in their quarterly business activity statements.
Conversely, withholding taxes between $25,001 and $1 million require monthly payments and reports for business owners.
Fringe Benefits Tax (FBT)
Small business owners pay fringe benefits tax (FBT) for additional benefits or perks they pay employees. Entrepreneurs must file an FBT return and pay any outstanding FBT tax.
Benefits that require FBT include the following:
- Private vehicle use
- Health insurance benefits
- Entertainment and hospitality expenses
- Housing and lodging expenses
- Non-monetary advantages
Goods And Services Tax (GST) Filing
Registering for GST means quarterly payments and reports for Australian business owners. They have no additional GST-related concerns at the end of financial year small business. However, they must ensure current and accurate information to ensure precise end-of-fiscal year reporting.
Superannuation Requirements
Superannuation obligations require current and accurate payments. The ATO allows business owners who pay before 30 June to claim the payment as a tax deduction for the current year instead of the next one.
7 Tips For Your End of Financial Year Checklist for Small Business
- Prepare your small business EOFY checklist early: It’s not just important, it’s imperative for business owners to prepare early for their EOFY tax obligations. Doing things at the last minute may result in critical mistakes that seriously affect your business. Early preparation gives you a sense of control and allows you to be proactive in managing your financial responsibilities. Analyse your financial documents months in advance to ensure they are precise and comprehensive. Mark inconsistencies and fill gaps in your financial records.
- Prioritise consistent recordkeeping: Maintain accurate, organised records of your receipts, invoices, and other financial documents so you can easily retrieve them from your database. This practice not only ensures that you are well-prepared for EOFY but also gives you a sense of security knowing that your financial records are in order. Analyse your expenses to turn tax deductions into potential savings. You must organise your financial reports before filing your taxes with the ATO.
- Do an inventory count: A stocktake or inventory count is a good practice for Australian small business owners. Evaluate inventory values and determine the cost of goods sold (COGS) to make your tax reports precise and error-free.
- Complete your small business payroll and STP: Small business owners who use Single Touch Payroll (STP) don’t need to include extra payment summaries and reports. However, the ATO requires payment summaries for small business employees. The Australian government also requires payment summaries for income small business owners didn’t report in their STPs. To avoid penalties, ensure your superannuation guarantee responsibilities are current and precise. These mandatory contributions recently increased by 11.5% on 1 July 2024.
- Ensure current depreciation schedules: Organising your end of financial year checklist for small business takes more effort than maintaining annual depreciation schedules for your company resources. Examine all asset values before the end of the fiscal year to ensure optimal financial statement accuracy. This step entails considering changes in depreciation rates, including deductions.
- Analyse capital gains and losses: We recommend that small business owners who incurred capital gains or losses during the fiscal year compute their capital gains tax (CGT) liabilities. This step ensures that you will optimise your small business’s benefits and follow ATO rules. Discussing capital gains liabilities with a small business accounting Gold Coast professional bodes well for your company’s future.
- Consider hiring a bookkeeper: A reliable bookkeeping services Gold Coast can assist entrepreneurs with your end of financial year checklist for small business. These professionals are critical in hectic EOFY preparations, primarily when 30 June draws near annually. By hiring a professional bookkeeper, you can feel relieved knowing that your financial obligations are being handled with expertise, and it can give you the confidence that you are meeting all ATO requirements.
Hire A Professional Bookkeeper Now
At TW Accounting, we are reliable and trusted tax accountants Gold Coast who can help prepare, finalise, and implement your small business EOFY checklist.
Our proven bookkeeping solutions have ensured that many Australian small businesses comply with ATO rules and regulations. Please contact us between 8:30 a.m. and 5:00 p.m AEST, Monday through Friday, to discuss your bookkeeping requirements. One of our staff members will assist you immediately.