The end of the financial year is a great time to address the loose ends associated with your business. Here’s a quick look at practical EOFY Tips for Mortgage and Finance Brokers
#1 Have your documents ready
Prepping and collecting all information can make the tax filing process a lot easier. While the list of documents could be quite long, some prominent ones include:
- Income and expense statements
- Business Activity Statements
- List of Asset purchases
- Expense Records and bills
Also, be sure to
- Maintain digital copies of physical documents
- Back up all your files
#2 Understand & claim tax deductions
Thoroughly understand all claims and tax deductions. Rely on professional advice if possible. Know what business expenses you can claim deductions for. Here’s a list of everyday business expenses that are eligible for deductions.
- Marketing costs
- Motor vehicle costs
- Travelling for business costs
- Lease and rent payments
- Equipment cost
Small Businesses can also benefit from “Limitless Asset Write-off”. Under this initiative, you can claim up to 100% on the purchase of new or second-hand equipment or vehicle made before July 2022. The earlier price cap of $150,000 has been lifted, and there is currently no cap on the price.
#3 Minimize Tax payments
There are multiple ways to minimize tax. Some relevant hacks for this year are
- If you have reasonable cash reserves, consider prepayment of bills to bring forward tax deductions and bring down current financial year taxes.
- Examine your business structure. Taxes vary for different business structures. For instance, taxes for small business were reduced from 30% in 2019 to 27.5% in 2020 and are currently 26.5%. But taxes for a mortgage broker could cross 45%. So, if you are a sole operator, look at restructuring your operation to small business.
- If you have employees on your payroll, make super payments by June 15 to claim a tax deduction.
Stay updated on all tax changes. For the latest ATO announcements, click HERE.
#4 Prep for next year
Manage cash flow to ensure that you are in a position to make timely tax payments. Avoid putting off taxes to the last minute. Have systems and processes in place to archive proper expense bills. Another preparation tip is to consider fixing your yearly wages rather than using company profits.
If you are the franchise of a reputed mortgage broking brand, you will receive regular guidance and yearly support with such EOFY processes. To reach us for a discussion, click HERE.