• Take care of business this tax time

    With another financial year drawing to a close it’s time for businesses to get their ducks in a row for Tax Time 2015. If you’re planning on doing your own tax return, our tips will help you get your tax right, avoid delays and start 2015-16 on the right foot.

    Keep in the loop

    You can keep up to date with any changes by subscribing to the Small business newsroom. Subscribers get the latest tax and super information in a simple, easy to read email that links them to the Newsroom website, so you find out what you need to know, when you need to know it. Subscribe at ato.gov.au/sbnews

    Take advantage of the instant asset write-offs

    From 12 May 2015 the instant asset write-off threshold increased from $1,000 to $20,000. This means you can immediately claim a deduction for business assets costing less than $20,000 in your 2015 income tax return.

    Similarly, primary producers can claim an immediate deduction for money spent from 12 May 2015 on fencing and water facilities such as dams, tanks, bores, pumps and more. They can also depreciate over three years the costs of fodder storage assets such as silos and tanks. Find out more at ato.gov.au/sbdepreciation

    Coming 1 July…

    There are a number of changes that may impact you from 1 July:

    • SuperStream starts for small employers (19 or fewer employees). Under SuperStream, all employers must make super contributions on behalf of their employees by submitting data and payments electronically. Small employers should be getting ready for SuperStream now. Find out more at ato.gov.au/superstream
    • Sole traders can now manage their activity statement and PAYG instalment obligations online through myGov. This means sole traders no longer need an AUSkey to manage these obligations online. You can register for myGov and link to ATO online services at my.gov.au

    Provide payment summaries by 14 July

    If you’re an employer, don’t forget to give your employees their payment summaries by 14 July. You should also lodge your PAYG withholding payment summary annual report at the same time so your employees can access their information through our pre-fill service.

    New financial year resolution - keep good records

    Good records help you monitor your business health, analyse your cash flow and demonstrate your financial position to others. Now is a good time to check that your systems and records are in order. This will make it easier for you to claim all your entitlements and avoid mistakes.

    You need to keep records of business transactions – including expense claims – for at least five years. Good record keeping makes sure you’re paying the right amount of tax – no more and no less.

    Finalise all PAYG instalments before lodging

    Make sure you lodge your fourth quarterly PAYG instalment before lodging your tax return so that you receive the right amount of credit in your income tax assessment. Doing so ensures you get four quarterly instalments applied towards your income tax assessment rather than three.

    Check your return for mistakes

    A large number of tax returns are delayed during processing or require a follow-up call from the ATO because of simple mistakes. So before you lodge, make sure you check your return for any errors or omissions – it could make a big difference in how long it takes for you to receive your tax assessment.

    Common mistakes made in business returns include:

    • Not completing the ‘Business and professional items’ schedule to show all business income and expenses.
    • Reporting total deductions in one label rather than including each deduction amount at their correct labels.
    • Reporting personal services income as business income and claiming deductions you may not be entitled to.
    • Partnership or trust distribution income reported at ‘other income’ label instead of ‘distribution’ label.
    • Incorrectly applying the capital gains tax discount to an already discounted gain received as part of a distribution.
    • Companies failing to gross-up distributions of capital gains (companies aren’t eligible for the discount).
    Last modified: 29 Jun 2015QC 46111