Taxation is not an easy path to navigate. Whether it be personal tax or company tax, there are many things to know when lodging your return in a lawful way and still being able to claim as many expenses as possible.

Most of our clients have tried lodging a tax return on their own, only to discover the complexities of the Australian Taxation system. Let me give you some advice: when you engage an accountant to lodge your tax return, you can deduct the accountant’s fees 100% from your taxes. So it really is a no-brainer—you receive professional help, expert tips and advice, and a bigger tax return with fully claimable fees! What a win!

The Importance of Hiring an Accountant for Your Tax Return

Many business owners know that handling paperwork for compliance and returns involves a lot of effort.

Stay on top of your BAS (which you can pay monthly, quarterly, or annually depending on your business setup), GST Reporting, PAYG reporting, payroll tax, fringe benefits tax (FBT), company tax, and capital gains tax. There is no one-size-fits-all approach. Each business is different and unique. As accountants, we serve you and your business with the best financial advice and service. We handle all these different areas of company tax for you, so you can concentrate on the areas of your business where you excel (spreadsheet pun intended!).

Should you be an individual who needs assistance in lodging their own tax, this is also something we can help with. We are up to date with all of the tax changes that the ATO has decided, like:

“From 1 July 2024, the proposed tax cuts will: reduce the 19 per cent tax rate to 16 per cent. reduce the 32.5 per cent tax rate to 30 per cent. increase the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000”

https://www.ato.gov.au/

At Profit First Accounting we are fluent in all things tax. We get asked loads of questions like:

Can I claim sunglasses on my tax return?

A: If it is for work purposes, yes. This means protective eyewear could include: anti-glare or photo chromatic glasses, sunglasses, safety glasses or goggles.

Can I claim my car on my tax return?

A: Yes, if you use a car for work purposes, you may be able to claim depreciation, as well as running costs (such as fuel, insurance, registration, lease payments, interest on loan repayments etc). We suggest you keep a log book for at least 12 weeks, plus any relevant receipts.

I work from home, what can I claim on my tax return?

A: There are many items you can claim if you work from home, such as home office equipment, computers, printers, phone and calls, and electricity.

I want to pay as few taxes as possible. Shouldn’t I run up expenses to cut taxes?

A: One of the most damaging myths of money management is running up expenses to reduce taxes. Spending ten dollars to save three is very damaging to the business. The goal is to run the business as profitably as possible (the only way to achieve financial freedom), and you should work closely with a Profit First Professional, like us, to further reduce your tax liabilities as much as you can.

Claim Deductions and Ensure Compliance with a Tax Accountant

As a general rule if you are purchasing an item directly related to your employment and are not being reimbursed by your employer for these expenses you should be able to claim a deduction when lodging your return.

Remember you must keep receipts for 2 years for a simple return, or for more complex tax returns, usually relating to larger businesses, you need to keep your tax records for 5 years. This is important should you or your tax accountant be audited. The ATO does have several triggers in place when it comes to audits, such as large home office expenses, work-related travel expenses, discrepancies with FBT and income tax returns, or inconsistent tax returns and BAS. So perhaps it is better not to push for the kitchen and bathroom renovation or the family trip to Disneyland as part of your tax return!

A tax agent will be on time, every time. Awareness of all compliance deadlines ensures your return is submitted on time, so you don’t pay any late fees. Additionally, using a tax agent typically gets you a generous extension on the deadlines to submit your tax return, buying you extra time to pay your tax bill.

Profit First Money Management System for Tax Budgeting

Budgeting for tax time can also be a challenge, especially if you end up with a tax bill. This might lead to a negative mindset and stress when trying to pay ATO dues.

To secure funds for your needs (without spending elsewhere), consider adopting the Profit First money management system. When revenue comes into your account, you allocate certain percentages to different accounts (one being for tax). Read more about the accounts needed here: Starting the Year Financially Fit: A Profit First Guide

Profit First is not limited to businesses. Individuals and families can also benefit greatly from this cash strategy. Check out our blog about Mastering Personal Finance with Profit First.

Feeling overwhelmed with taxes or financial management? Don’t worry, assistance is here for you. We are passionate about helping our clients live the lives they want, and your financial freedom journey can start today. Simply book a call and let’s see how we can help you.