2020 is the most challenging time for everyone, including business owners too. This pandemic attack and business crisis make tax planning for the EOFY more crucial than the previous year.
There are many keys and obligations that every business entrepreneur needs to know to minimise the tax flow. Some may have opted for manual listing and reduce the ATO tax audit process to reduce the tax.
According to the report, the Australian Taxation Office or the ATO will implement some tasks during the tax payment time. So, we have outlined some of the best tips to help you be ready for the tax return policy of 2020. The tips will also assist you in dealing with tax returns and payments.
Avoid Extra EOFY Spending
Spending extra money to maintain the tax records would not make sense if you have less cash flow. This is obvious that cash flow plays an important role, but the coronavirus pandemic outbreak has already cut down the cost and revenues.
So, instead of spending money on unnecessary tasks won’t make you pay extra. Moreover, it will help you to save some extra and reduce the tax payments.
The Update on Single Touch Payroll
It is important to note that small businesses with less than 20 employees need to pass through the single touch payroll from the end of the financial year.
However, due to this pandemic situation, the date has been extended so that you can start the STP earlier than the end of this date.
The Stocktake
The business that deals with goods and services sell and buys records need to maintain the stocktake during the EOFY to pay the tax. The increase and decrease in the stock and calculation would be easier to maintain the tax return on the business profit.
Say if your business has a turnover of $10 billion or below it, then you can quickly access the stock rules that say not to opt for stocktake for the tax filing. However, if the value is different, you need to have the stock takes and pay the tax. For this, you can also opt for three methods.
- Calculate the cost
- Marketing goods sales value
- The replacement values
Manage the Payroll Tax
The payroll tax has been applied to all the business entities with the Australian Payroll that may exceed the business limit. Thus, you must prepare for tax addition to wages and salaries tax. The payroll expenses must involve;
- The contribution of the employees to the superannuation in the absence of the employees
- The benefit of fringe based upon the taxable values that offer the fringe benefit.
- The fees of the contractors and the sub-contractors
The ATO Audit Activity
The ATO activities have been increasing immensely to automate the audit activities. The increasing audit activities are for payroll tax, PAYG withholding, GST, and trust distributions. Instead of this, opting for the single record-keeping procedure will do the audit procedure more accurately and save your lot of debts too.
The Last-Minute Tips for Tax Deduction
- Make the write-off debts load earlier in your system
- Make a write off of the stock damage
- Make the review of the scrap and the assets that may have obsolete equipment
- Pay for the repairs, materials and office stationery and other marketing goods
- Be sure about the contribution of the superannuation that is made to reduce the tax deduction
Final Thoughts
The end of the financial year needs to deal with a lot of tax payments. But for a tax deduction, you need to have these tips for managing those tax works for the end of the financial year.