14 Tax Considerations for Business Owners

As a small business owner too, we know how busy EOFY can be. So, we’ve pulled together 14 tax considerations for Business Owners, to help you prepare for your 2022 Tax Return.

Tax checklist for Businesses (all structures)

1. Are Your Accounts reconciled up to date?
2. Have you checked that all bank accounts reconcile?
3. Have you checked your Account Receivables/Debtors reconcile?
4. Have you checked your Account Payable/Creditors reconcile?
5. Is there any work you have invoiced for but not yet completed as at 30 June? You may be able to move this income to next financial year for tax purposes.
6. Do you have any bad debts you can write off? Consider taking these up by 30 June.
7. Are there any general expenses you can prepay? E.g. Insurance, Rent, Phone, Electricity, Interest?
8. Have you considered topping up your own superannuation contributions? The Concessional Cap for 2022 is $27,500.
9. Have you reviewed your stock for obsolete stock that can be written off?
10. Ensure you carry out a stock take at 30 June 2022.
11. Are you considering paying bonuses? Any decisions made to pay in the following financial year can enable the amounts to be claimed in the current financial year. It’s important to note that this is where the bonus is declared, and a liability raised to be paid (ie. Not just a provision). Seek professional advice to ensure you meet the requirements.
12. If you operate a professional services business (e.g. solicitor, medical practitioner, architect, engineer, financial planning), have you considered your profit allocation choices and how they may impact your audit risk? Refer to PCG 2021/4 – we suggest you work with your accountant prior to 30 June.
13. Is your car logbook up to date to enable choice of claim methods?
14. Your June Quarter Superannuation is not due until July (and deductible in 2023 year), however if you pay in June (must clear super fund’s account by 30 June 2022) you can claim the deduction in the 2022 year.

BONUS Tax Tips for Business Owners

Assets Purchased between 6th October 2020 to 30 June 2022 qualify for temporary full expensing (write off in full):

• If turnover is less than $50m – applies to both new and secondhand assets
• If turnover over $50m – applies to new assets only

• • No limit on amount of deduction
  • Cannot claim on building and capital works
  • Must be installed ready for use by 30 June 2022 to claim in 2022 financial year
  • If you are considering purchasing assets you should consider how the above write-offs will assist

Temporary Loss Carry-Back (company structure only)

If your company makes a taxable loss in the 2020, 2021 or 2022 Financial Years you can carry the loss backwards and apply to taxable profits in the 2019, 2020 and 2021 years.

• There must be a surplus in the company franking account (meaning that the profits haven’t been paid out as dividends)
• May result in refund of previously paid tax (which will be calculated at tax rate in the loss year)

If you’re a Lemonade Beach client, we will be checking your eligibility and will discuss these options with you.

We’re here to help

If you’d like to learn more about how we can assist you this tax time, please visit our Business Accounting and Tax or Personal Tax page.

And don’t forget to download our complete 2022 Tax Planning Checklist to hear what else you should be considering for your Personal Tax Return, or if you have a Trust.

You might also be interested in our 2022 Personal Tax Checklist blog post.