It’s tempting to leave dealing with your finances until after the end of the tax year. It’s only a few weeks away now so what difference will it make? Well here are three things that might help you reconsider putting it off until the end of the June.
1. Getting Your Registrations in Order
If you’ve been on the cusp between running a hobby or business, now might be a good time to get registered and start tracking those deductions. You don’t want to have to backdate it to a previous year to be able to claim those materials you have in the craft room. Also if you’re close to the GST registration threshold, you need to know with certainty when you have gone over the threshold or expect to go over the threshold. The ATO won’t accept ‘but I hadn’t done my accounts for three months’ as a valid reason for not registering.
2. Profit Available for Investment
If you knew you could either purchase a new piece of equipment for $100 or pay an additional $38 in tax which would you choose? Effectively you are buying the $100 equipment for $62. If you get ahead and know that you are in profit before 30 June, you have an opportunity to utilise some of those profit to reinvest in your business. Remember may items up to $20,000 can be deducted immediately. Also, what might you need to fill up on that could increase your valid deductions? Materials or supplies? Business cards or printed marketing materials? Investment in a financial coach to help you get this sorted – hint.
3. Make sure everything is paid and invoiced
It’s also good to know if you’ve paid out everything that is owed so you can claim it as a deduction – that supplier’s bill you’ve been avoiding, the bill from Etsy etc. Secondly have you invoiced everything you can and collected the monies owed to you. Many businesses use June to clean up their finances, they may have annal budgets and targets to meet or they may have their own profit to reinvest to reduce their deductions – paying you might just help their deductions!