The start of the new Financial Year is here and it is more than just a date on the calendar—it’s a catalyst for growth, innovation, and financial success. So, let’s delve into this exciting time and explore how you can make the most of the new financial year!
What is the Australian financial year?
The Australian financial year, also known as the fiscal year, is a designated period utilized for tax obligations, budget planning, and financial reporting in Australia. It spans from 1st July to 30th June of the following year, deviating from the conventional calendar year of 1st January to 31st December. This framework was legally established in 1851 as a means to streamline taxation processes and facilitate accurate financial reporting. Adhering to the Australian financial year is of utmost importance in order to ensure compliance with reporting requirements set by the Australian Taxation Office (ATO).
Simplify Your End-of-Financial-Year Preparations in Australia with These Handy Tips
- Keep Your Records Up to Date: Start by organizing your important paperwork. It’s crucial to maintain records such as receipts for sales and business purchases, tax returns, Business Activity Statements, GST returns, and employee super contributions. Keeping these documents handy will make it easier to navigate through the EOFY process efficiently.
- Simplify Accounting with Online Tools: Separating your personal and business banking can significantly simplify your accounting tasks. By having a dedicated business bank account, you can consolidate all your business expenses in one place while avoiding the risk of mistakenly claiming personal expenses. If you have access to online banking, take advantage of features such as third-party access to share information with your accountant and bank feeds to integrate your banking facilities with accounting software.
- Maximize Your Deductions: Understanding which expenses are eligible for tax deductions is essential for maximizing your savings. As a business owner, you can typically claim deductions for business expenses like interest and fees on loans. Remember to keep records to support your claims. Additionally, consider taking advantage of the government’s temporary full expensing incentive to immediately deduct the cost of eligible business assets.
- Fulfill Superannuation Requirements: If your business has superannuation guarantee (SG) obligations, ensure that employee contributions are paid by 30 June 2022. Meeting these requirements not only fulfills your obligations but may also allow you to claim a tax deduction on your income tax return. Contributions should be made to complying superannuation funds or retirement savings accounts for the benefit of your employees.
- Stay Mindful of Important Dates: Avoid penalties and stay on top of your obligations by noting all the crucial dates in your calendar. Setting reminders for lodgment deadlines and other important tasks will help you stay organized and compliant with the Australian Taxation Office (ATO).
Preparing for the end-of-financial-year doesn’t have to be daunting. By following these five straightforward steps, you can efficiently manage your paperwork, simplify your accounting, maximize deductions, fulfill superannuation obligations, and stay on top of important dates. Remember, staying organized and informed will lead to a smoother transition into the new financial year while ensuring compliance with ATO regulations. Talk to our experts and kickstart your financial year on the right foot now!