3 ways to reduce tax related stress
We have all felt financial stress at some point in our life. Numerous studies and research show when it comes to managing our finances, it can trigger a stress response almost instantly. No matter your financial position, whether your business is big or small, tax time can make you feel the heat.
But what if it didn’t have to be so stressful? One of the best ways to avoid financial stress is to plan. Planning will play a simple yet vital role when it comes to your business. Here, we give you some great tips to make tax time easier for you.
Keeping comprehensive business records
Keeping good business records allows you to keep track of your business’ health and financial position. This helps you make good business decisions, manage your cash flow and keep on top of your tax obligations.
How do you currently track all of your records? Whether it is manual, paper-based, or online, you need to have good systems in place.
If you are using accounting software, look at their documentation tracking systems. Could you keep your receipts attached to the relevant transactions to make it easy to find if needed? We can assist you if this is something you would like to look into.
If you are tracking your paperwork manually, we recommend setting up a “tray system” of bills to pay. Once they are paid, they go in a folder set out month-by-month. At the end of the year you can collate them all into one folder for that financial year. This also works if you want to keep your paperwork electronically. You can also separate them into income and expenses to make it more user friendly.
If you are unsure what you need to have ready for us at tax time you can always check out our tax checklists on you website - Getting Tax Ready — Lincolns.
Consulting your Accountant
We could not leave seeing an accountant out of this list. Accountants seek to get to know you and your business which allows them to understand your needs. In fact, staying connected with your accountant regularly throughout the year can help you better prepare for tax time, as your accountant will already be across your situation. You don’t need to see your accountant or reach out only when it comes to tax time. You can run business ideas by them, discuss the impacts of certain decisions you may be facing in your business plus we also have in-house HR and IT assistance if required.
Have a tax estimate prepared
If you own a business, having a tax estimate done is another beneficial way to keep on track of your business and help avoid any unexpected surprises at tax time. We will have a look at where your business is sitting at this point in the year and discuss what it is likely to do leading up to end of financial year. This will then assist with making decisions on timing of jobs, purchases and plant replacement and allows you to be better prepared and understand your obligations to the ATO.
Do you know your key dates and lodgement dates for your business?
Knowing key lodgement and payment dates for your business will allow you to prepare more efficiently. Here are some examples of dates that may be useful to know:
Superannuation Guarantee
GST
PAYG Withholding
PAYG Instalments
To assist you with this we have a created a Lodgements Deadline Timeline which is available on our website - Resources — Lincolns. We would recommend you also have a look at some of the resources we have available such as STP processing videos, business health checks and more!
Whilst research shows Australians have a hard time and stress levels are increased when tax time approaches, here at Lincolns we recommend preparation over procrastination and believe the above steps can really make a difference in alleviating stress for you and your business.
A Coffee With… Dylan Lott
This month Robert Prior and Melanie Fry caught up with Dylan Lott, business owner of DJL Electrical. We wanted to get insight from Dylan on how and why he chose to start his own business in the electrical field and the challenges he’s overcome to make his business so successful.
