The advantage of owning your own business is that it ensures your progression to financial independence. Instead of relying on an employer to handle your benefits and retirement plans, you have more freedom in directing how your career will go. However, this level of liberty doesn’t come without a cost.

Owning your own business requires you to perform, among other things, rigorous tax regulations. It’s an entrepreneur’s responsibility to fulfil their own tax obligations. Otherwise, they can face hefty penalties that drastically reduce monthly profit margins.

Knowing Your Obligations to the Australian Taxation Office (ATO)

As an employee, you didn’t have to worry too much about income taxes and how they affected your financial stability. This is because your employer handles all the paperwork in line with their organisational structure. Now that you are your own boss, you should have a good grasp of these tax obligations to ensure hassle-free business operations. This keeps your business free from penalties because of missed or incorrect dues.

While balancing your finances, here are three business taxes you should remember to file:

Corporate Tax

The most basic tax form you need to master is filing for corporate tax. It’s essentially a percentage you pay to the ATO for your company’s profits. Businesses that earn less than $10 million yearly must pay a 28.5% corporate tax, while businesses going beyond this margin must pay 30% of their annual profit.

Payroll Tax

After overseeing your business’s yearly profit, you also need to account for your employee’s wages. The payroll tax you’re obligated to submit depends on the state government’s guidelines. This will depend on the territory that your employees are situated in. Since payroll tax thresholds will vary with every state, you may need to change your payment practices. You can do this by segmenting the payroll terms of your employees based on their location.

Remember that you also need to account for Pay as you go (PAYG) withholding that comes with collecting income tax payments from your employees. This means you must account for the cut percentages of these values while giving the appropriate salary value to your employees. Since these figures and categories may be confusing, it’s best to use a ledger for all the computations and percentages.

Goods and Services Tax (GST)

Australia’s GST is set at 10% of the price of your goods and services. It’s an obligation you have to pay to the ATO if you fall under specific qualifications. You’ll need to file a GST if your annual business income reaches beyond $75,000 or more per year, or if you include taxi travel for your operations, or you want to avail of fuel tax credits. You can pay for these dues monthly, quarterly or annually.

Conclusion

Keep in mind that you will need to confirm if these tax obligations apply to your business. You will have your hands full worrying about operations and these tax filing duties. Filling up these figures and forms can be overwhelming, especially if you’re also busy running your company. Thankfully, you can outsource your accounting needs to capable firms with the experience and versatility of handling different enterprises. Having a reliable accounting firm to work with will lessen your burden as a business owner and speed up your timeline for scaling your company!

If you want to partner with a reliable accounting firm on the Sunshine Coast, our team at SMB Accounting can help. Our professional accountants perform different forms of tax services to ensure accurate and balanced ledgers for your operation. Contact us today at 1300-854-159 to avail of our subscription packages.

For decades, the concept of tax write-offs is something that Australian businesses have had quite a bit of difficulty wrapping their heads around. From small mom-and-pop retailers to multinational corporations, the financial tool in question has maintained a sort of mystified aura because of all the different details involved. Unfortunately, this unfamiliarity has hindered companies from maximising tax write-offs to their advantage because a certain level of knowledge is required to utilise it as best as possible.

If you’re a business owner looking to alleviate your business’s costs, then the tool in question poses a valuable opportunity worth capitalising on. Fortunately, the experts at SMB Accounting have put this guide together on everything you need to know about tax write-offs so that you can get your optimisation efforts well underway:

What is a tax write-off?

Alternatively known as an instant asset write-off, tax write-offs allow eligible businesses to claim immediate deductions for the business-related portion of the costs of an asset. Generally, this particular privilege is made available in the year the investment is first used or installed ready for use.

When it comes to eligible usage, instant asset write-offs can be used for multiple assets as long as the cost of each individual purchase is less than the relevant threshold. Additionally, this same financial tool can be used for new and second-hand purchases. However, it is worth noting that tax write-offs cannot be used for assets that are excluded from the Australian Taxation Office’s simplified depreciation rules.

How do tax write-offs work?

While there are many simplified definitions for how the tool in question works, the best way to define a write-off is that it’s an expense that can be claimed as a tax deduction.

When you look at the functional aspects, the way tax write-offs work is that they’re deducted from a business’s total revenue to determine total taxable income. In full effect, this tool helps alleviate the incurred costs that businesses run into whenever they invest in specific items necessary for a business’s operations. However, it is important to note that once applied, these write-offs are meant for tax deduction purposes and not actual cost reimbursements!

Given the way they work, qualifying write-offs are now considered essential to running a business because of how instrumental they are in managing expenses and reducing overall costs. Although a write-off doesn’t need to be 100 per cent necessary, it’s vital that you consider it as a regular expense that helps run the business!

How do you qualify?

Among the different aspects of instant asset write-offs that businesses struggle with the most, the main facet that bears the most difficulty is the matter of qualification.

For starters, it is important to note that you will have to check your business’s eligibility and apply the correct threshold amount so that you can pinpoint the exact figures or cost components that you’ll write off. Additionally, using the tool in question also means that you’ll need to be mindful of when an asset was purchased, first used, or installed ready for use to certify its qualification or eligibility as a cost that can be written off.

Beyond qualifications, it is also important to understand that the instant write-off eligibility criteria and threshold have changed over time. In the context of the current COVID-19 situation, the Federal Government is expected to reinforce the availability of an instant asset write-off and increase its threshold from $30,000 to $150,000.

Conclusion

While the prospect of using an instant tax write-off or tax write-offs can be an intimidating idea at first, it’s important to know that the tool in question can be easy to work with once you consider the right points. By taking the above-mentioned pieces of knowledge into mind, you’ll be able to ensure that you provide your business with the means to stay ahead of the curve and reduce its tax expenses at all costs!

We’re a business accounting firm on the Sunshine Coast specialising in a number of financial services, including tax returns, audits, as company set-ups, and ongoing bookkeeping and accounting services that will help your business stay on top of its books. Get in touch with us today to see how we can keep you in financial shape!

If there’s one thing that can make or break your small business, that’s cash flow. When you have a solid cash flow plan, you can help reduce the stress for you and your creditors and have sufficient funds to help your business expand. This is why it’s important to have a cash flow forecast — but what does it really do?

A cash flow forecast tracks the money that comes in and out of your business within a minimum of six months. This way, you’ll be able to estimate business peaks and obstacles with regards to cash and ensure you can budget your money for upcoming payments. Besides that, it also triggers you to negotiate suppliers, manage demand and surplus, and purchase necessary assets. 

For this reason, many business owners seek assistance from experienced accountant firms, like SMB Accounting. Here, we can help business owners strategise, manage bookkeeping, and take hold of all accounting-related tasks to ensure your business runs smoothly. 

Is a Cash Flow and Budget the Same?

Budgets were designed to predict how a business will perform during a specific timeframe. This often includes non-cash items, like outstanding creditors and depreciation, and can even help with tax planning. 

On the other hand, cash flow forecasts concentrate on the cash position during a period, but unlike the budget, these cash flows don’t feature non-cash items. 

In summary, budgets will give you an overview of your profit position. In contrast, cash flow will give you your business’s cash position. 

Cash Flow Forecast Tips You Should Know

1. Know Your Customer’s Payment Terms

Receiving payments can be tricky, especially when your customer refuses to pay or cannot pay the full amount. With that being said, it helps to provide other payment alternatives, such as “cash on delivery” or instalment payment, so you can gauge profit and avoid debt. 

2. Send Out Invoices Right Away

Whenever you’re making a sale, you must send out the invoice immediately. Not only will this help with bookkeeping and accounting, but it will also keep you on track with your cash flow forecast. 

Some businesses opt for the “end of the month” invoice process, but this can be quite tricky as it can cause some delays. When that happens, it’s either you may miss out on getting paid, which could ultimately disrupt your cash flow. 

3. Offer Discounts for Up-Front and Full Payments

As mentioned earlier, some customers can have a tough time paying for your products and service. To help them out, consider offering a discount when they pay in full and up-front. 

4. Have a Deposit System

If you’re dealing with large invoices, you can have a deposit system that will allow customers and clients to pay small up-front payments from time to time. This is particularly helpful since it helps fund wages for your staff and enables you to buy materials. 

5. Don’t Overdo Excess Stocking

Though it’s always better to be safe than sorry, carrying excess stock can come at a cost. When you have stock sitting around in your storage room, you don’t get any cash in return. This is why it’s vital to have a good relationship with your supplier so you can have stocks delivered in a specific timeframe to avoid any wastage. 

6. Work With an Accountant

One of the best moves you can do to ensure a solid cash flow forecast is to work with reputable accountants. This way, their experience can help you with your business’s financial needs, allowing you to create accurate forecasts that can help your business avoid financial challenges, such as skipping deadlines and going over budget. 

The Bottom Line: Having a Cash Flow Forecast Can Do Wonders for Your Business

Financial matters are an integral part of running your business. This means ensuring your cash flow forecast is in check, you’re on track with your budget, and you’re practicing adequate bookkeeping and accounting duties. Ideally, you want the help of accountings to ensure that your finances are taken care of by the right hands. 

How Can We Help You?

If you’re looking for an accountant in Caloundra to help you with your business’s finances, SMB Accounting is here to help.

We offer various accounting services, such as individual tax returns, small business accounting, SMSF audits, trust account audits, special financial statements, and more. Learn more about how our accountants can help your business today!

Personal income tax changes

Retaining the Low and Middle Income Tax Offset (‘LMITO’) for the 2022 income year

The Government has announced that it will retain the LMITO for one more income year, so that it will still be available for the 2022 income year.

Under current legislation, the LMITO was due to be removed from 1 July 2021.The LMITO is a non-refundable tax offset that provides tax relief for low and middle income taxpayers and is available in addition to the Low Income Tax Offset (‘LITO’). The amount of the offset is $1080 and tax payers receive the full amount if their income is between $48,001 – $90,000

Below this threshold and above the threshold the amount is phased in or out. You will not receive any if your income is > $126,001

Personal Tax rates remain unchanged for 2021-22, Stage 3 tax rates start from 2024-25 unchanged

In the Budget, the Government did not announce any personal tax rate changes, having already brought forward the stage 2 tax rates to 1 July 2020 in the October budget. The stage 3 tax changes commence from 1 July 2024, as previously legislated.

 Reducing compliance costs for individuals claiming self-education expense deductions

The Government will remove the exclusion of the first $250 of deductions for prescribed courses of education. Currently, the first $250 of a prescribed course of education expense is not tax deductible. Removing this $250 exclusion is expected to reduce compliance costs for individuals claiming self-education expense deductions.

Changes affecting business taxpayers

 Temporary full expensing extension

In the prior year (2020/21) Federal Budget, the Government announced amendments to allow businesses with an aggregated turnover of less than$5 billion to access a new temporary full expensing of eligible depreciating assets until 30 June 2022.

In the 2021/22 Federal Budget, the Government has announced that temporary full expensing will be extended by 12 months to allow eligible businesses to deduct the full cost of eligible depreciable assets of any value, acquired and first used or installed ready for use by 30 June 2023. All other elements of temporary full expensing will remain unchanged, including the alternative eligibility test based on total income, which will continue to be available to businesses.

Temporary loss carry-back extension

In the prior year (2020/21) Federal Budget, the Government announced amendments to introduce a temporary loss carry-back measure. In the 2021/22 Federal Budget, the Government has announced that the loss carry-back measure will be extended to allow eligible companies to also carry back (utilise) tax losses from the 2023 income year to offset previously taxed profits as far back as the 2019 income year when they lodge their tax return for the 2023 income year.

Debt recovery for small business

The Government has announced that it will allow small business entities (including individuals carrying on a business) with an aggregated turnover of less than $10 million per year to apply to the Small Business Taxation Division of the Administrative Appeals Tribunal (the ‘Tribunal’) to pause or modify ATO debt recovery actions, such as garnishee notices and the recovery of general interest charge or related penalties, where the debt is being disputed in the Tribunal.

Currently, small businesses are only able to pause or modify ATO debt recovery actions through the court system, which can be costly and time consuming. It is expected that applying to the Tribunal instead of the courts will save small businesses at least several thousands of dollars in court and legal fees and as much as 60 days of waiting for a decision

Superannuation related changes

Removing the work test for voluntary contributions

The Government has announced that it will allow individuals aged 67 to 74 years (inclusive) to make or receive non-concessional contributions (including under the bring-forward rule) and salary sacrifice contributions without meeting the work test, subject to existing contribution caps. Individuals aged 67 to 74 years (inclusive) will still have to meet the work test to make personal deductible contributions.

Removing the requirement to meet the work test when making non-concessional or salary sacrifice contributions will simplify the rules governing superannuation contributions and will increase flexibility for older Australians to save for their retirement through superannuation.

Reducing the age limit for downsizer contributions

The Government will reduce the age limit from which downsizer contributions can be made by eligible individuals, from65 to 60 years of age.

The downsizer contribution allows eligible individuals to make a one-off, after-tax contribution to their superannuation fund, of up to $300,000 per person, following the disposal of an eligible dwelling, where certain conditions are satisfied. Under the current requirements, an individual must be at least 65 years of age at the time of making the relevant contribution, for the contribution to qualify as a downsizer contribution.

Removing the $450 per month threshold for Superannuation Guarantee eligibility

The Government will remove the current $450 per month minimum income threshold, under which employees do not have to be paid SG contributions by their employer.

Changes to the First Home Super Saver (‘FHSS’) scheme

The Government has announced that it will make the following changes to the FHSS scheme.

  • Increasing the maximum releasable amount to $50,000

The Government will increase the maximum releasable amount of voluntary concessional and non-concessional contributions under the FHSS scheme from $30,000 to $50,000, to assist first home buyers in raising a deposit more quickly. Voluntary contributions made from 1 July 2017 up to the existing limit of $15,000 per year will count towards the total amount able to be released.

  • Changes to improve the operation of the FHSS scheme

The Government will make technical changes to the legislation underpinning the FHSS scheme to improve its operation as well as the experience of first home buyers using the scheme. These four changes will apply retrospectively from 1 July 2018, and will assist FHSS scheme applicants who make errors on their FHSS scheme release applications

Conclusion

This is a summary of the main areas which may affect you as an individual or as a business. However if you have any other questions regarding the budget send an email to stephen@smbaccounting.com.au

 

One of the most challenging things that every self-employed individual or business owner needs to face is getting taxes in order. Whether they like it or not, handling taxes with the correct paperwork should be done, especially when the end of the financial year is almost coming. Finding the right accountant will help you with that.

But, not accountants are the same. You must look for someone who’s reliable and well-equipped to handle the accounting details of your business. To give you some helpful insights to find the right accountant, consider the following tips:

Determine your needs

Before you interview and hire an accountant, make sure to evaluate first your needs. Do you need someone to handle your taxes? Or, do you need someone to organise your payroll and financial reports of your business? There should be a list of all the tasks that they need to do. Determine the services that you’ll need from an accountant. With today’s innovating trends in the finance and accounting industry, you might already be using accounting software. If that’s the case, you should find an accountant who knows how to use such tools and software.

Check their qualifications

Make sure that you hire a qualified accountant. You can look for being a member of a professional association, based on your needs. The most important is to check whether they are university qualified with a Bachelor’s degree, even better a post graduate qualification such as a Master’s degree. You do not require any formal qualifications to call yourself “Accountant”. Some people accept services from accountants who are not certified, registered or chartered. However, this is not highly advisable in most cases. 

Find a specialist

You can hire an accountant who is specialised in an area, or you can choose a general accountant who is well-rounded on various tasks. 

For instance, tax accountants can help specifically with the preparation of tax returns and implement a system for your business to handle tax matters more efficiently. There are also management accountants who can help analyse business reports, budget, and forecasts to create better decisions for the business. 

Financial accountants can handle tasks related to the management of financial records. Auditing accountants handle the checking of financial reports as well as collecting evidence to prove the data on the reports.

Consider location

Some self-employed individuals may opt to choose accountants in their local area. However, with the various tools and software today, you can also hire qualified accountants from anywhere around the worldall thanks to the power of today’s technology!

In case you consider working with an accountant who will work for you remotely, ensure that you maintain open communication so that any urgent matter will be given prompt attention. 

However, if you still prefer to work with someone who can do face-to-face meetings, you should research to find a list of accountants in your area.

Conclusion

A qualified and reliable accountant will help you handle crucial tasks such as bookkeeping, tax preparation, budgeting, and others. However, despite the many accountants available out there, you definitely would want to work with someone who is qualified, reliable and values professionalism. It is important to analyse your needs so that you will know how to hire the best accountant to work with.

If you’re looking for accountants who can help you organise your income tax returns on time, work with SMB Accounting. We offer a wide array of top-notch accounting services, so you’ll not have to worry about the tedious process. Get in touch with us today!

There are plenty of reasons why the Australian Taxation Office might want to run a tax audit on your business. It’s completely normal for businesses to go through this even though there are likely no problems on your end. If you’ve been filing correctly and you have the receipts for everything, then there’s nothing for you to worry about. 

But it is not uncommon for businesses to file claims that they can’t fully support beyond a reasonable doubt. To avoid any trouble with the ATO, try to steer clear of these mistakes businesses have tend to make when handling their finances and taxes. 

Work Expenses Without Having Receipts

Your receipts are essential to filing taxes as a small business owner. You can justify everything you buy for business purposes if you have the reason and the receipt behind it. If you don’t have a receipt on a business expense you claimed, you might as well have not filed it. 

The ATO can’t just take your word for it when you make business expenses without an official receipt. Aside from misplacing it, they can suspect you of either not making the purchase or buying the item under illegal circumstances. Neither of those will sound good for you as a business owner.

Home Office Expenses Where the House is not a Place of Business

Many small businesses start in a garage, on a kitchen table, or a small home office. But when your workplace is primarily residential, you can’t claim that the toilet paper you bought for the house is a business expense. In the same vein, you cannot claim a residential apartment’s rent is a business expense when it was not leased to you for business purposes.

Claiming 100% of GST on Purchase of Vehicles or Other Equipment 

It’s a common mistake for businesses to purchase vehicles or other equipment and claim all of it to be a business expense.

The only time you can claim full credit for the GST included in the price of the vehicle is when that statement is true. If it’s a delivery truck with your logo that you only drive to make orders, then the claim is valid. But if you’re driving around a car to use for personal errands as well, you can’t truly claim it to be 100% for business use. 

While you can use vehicles for business and private purposes, you cannot claim a full tax deduction for such vehicles. However, you are entitled to a reduced GST payment for the times that you do use these vehicles for business use. 

Conclusion

Tax audits conducted by the ATO may seem intimidating, but it is all for a good reason. Plenty of businesses have filed ridiculous claims, so be careful how you account for things. To avoid these mistakes throughout the year, the best advice is to hire a dedicated accounting service that knows exactly how to file business taxes for you.

To make sure you make fewer mistakes in your next tax audit, entrust your accounts to one of the top accounting firms along the Sunshine Coast. SMB Accounting offers trust account audits, audits of special purposes financial statements, special needs audits, and more. Contact us today!

 

Understanding the complexities of taxation is essential for businesses of all sizes. As a business owner, you have a range of obligations and responsibilities tax-wise that you need to fulfil. This can be easily accomplished if you’re working closely with accountants who know the ins and outs of taxation.

When it comes to taxes, the Australian Taxation Office (ATO) performs stringent measures during tax audits to ensure that businesses fulfil their obligations and follow the ATO’s guidelines to the letter. This makes navigating through a tax audit by the ATO a little tricky. If you want to avoid getting fined for some tax blunders, you better avoid these mistakes at all costs.

Claiming Deductions for Non-Business Related Items

Some companies engage in shady tax manipulations by claiming deductions for items that are in no way connected to their business. This includes claiming phone or computer use that are way above their actual use for business purposes. 

Another example is claiming GST tax-input credits for purchases that are not partly or solely intended for use in the operation of the business. It’s completely normal to purchase items intended for both business and private use as long as you only claim a GST credit for those purchases related to your business. Claiming otherwise will put you under the radar of ATO’s auditors.

Incomplete and Missing Tax Invoices

For any purchases costing more than $82.50, you need to keep a tax invoice, especially when you’re claiming a GST credit for it. What constitutes a valid tax invoice, you may ask? To be considered a valid invoice, the document needs to contain the following pieces of information:

  • The words “Tax Invoice” printed at the top of the page
  • The seller’s identity or business name
  • The seller’s Australian Business Number (ABN)
  • The date the invoice was created
  • A description of the items being sold, including quantity and price
  • The GST amount (if any) that is payable

If you hired accountancy services for your business, you need to inform them of these purchases and keep the tax invoice. As with other tax-related records, you must keep your tax invoices for a period of at least five years.

Treating Employees as Subcontractors

Some businesses treat their workers as contractors when in fact, they are employees. Companies do this to avoid obligations relating to employees, such as superannuation, sick leave, holiday pay, and payroll taxes.

According to the ATO’s business guidelines, a worker is considered an employee if they perform work under your direction and control. That includes work standards and set hours of work. Treating your employees as subcontractors is actually illegal and is subject to penalties and charges. It’s best to follow the ATO’s definitions of an employee vs. a contractor and give them the appropriate compensation while fulfilling your obligations relating to their employment.

Conclusion

Committing any of these mistakes can be quite costly. So it’s best to avoid them as much as you can. The best way to pass the ATO’s audit with flying colours is to have a deep understanding of everything there is to know about taxation for businesses. That may sound like a daunting task. But with the help of a capable accountant, taxation is nothing to worry about.

Every business needs to rely on a team of competent accounting professionals to maintain the growth of their business. This is where SMB Accounting works best. We offer a range of accountancy services for businesses, including taxation, auditing, and cloud accounting services. Get in touch with us today to get started.

Whether you earn money from work or investments, you usually need to pay tax on your income and fill out income tax returns. You can also get tax deductions from certain expenses. Unfortunately, many people miss legitimate tax deductions they truly deserve. To make sure you get the full tax refund you are entitled to this year, here are some tips you should consider:

Save and organise your receipts

You may spend countless hours tracking down receipts for purchases you made over the previous year during tax time. As a result, you waste time and probably lose hundreds or even thousands of dollars in your refund. Because of this, you should file your invoices and documents and save every relevant receipt. 

For instance, whenever you make a work-related purchase, keep your receipts and place them in a folder. If you are working from home, save invoices of the Internet, power, phone, and water and note in a logbook or diary how much time you spend working at home. 

Meanwhile, it’s advisable to save receipts if you are unsure whether that expense is deductible or not, then consult your tax consultant for advice.

Claim all the tax deductions you can

Getting a higher tax refund is possible by claiming all the tax deductions you can. Therefore, claim deductions for every work-related expense that you are legally entitled to and costs your employer has not already reimbursed you for. These include tools and equipment, such as Internet bills, meals, travel expenses, and laundry.

Make charitable donations

Stand up for a good cause you care about while lowering your tax bill by making charitable donations. Donating small amounts might not seem like much, but they can add up to hundreds of dollars across the year. Be sure to save your receipts, and then you can eventually claim your tax deductions. 

Don’t rely on pre-fill data from the ATO

Filling the fields with pre-filled data from the Australian Taxation Office (ATO) may seem like a shortcut that can help you save time and effort, but it’s actually not. Remember that banks may pass information onto the ATO late, making your data out-of-date. Therefore, it is still better to use your own information as your source data. 

Note also that the simplest of mistakes can hold up your tax return. When providing your details, check it multiple times to ensure it is error-free. Check your spelling and grammar, confirm your information, see if it matches your tax file number, and get your bank details right to ensure your funds reach your account.

Hire an expert

Tax can be complicated, especially if you lack knowledge about it. Save yourself the stress and hassle of dealing with this on your own by hiring a tax professional. This way, you can guarantee maximum refunds and ensure you prepare your taxes accurately.

Conclusion

Taking advantage of a bigger tax refund can be challenging, especially if you don’t know where to start and you are worried about getting in trouble with the ATO. Fortunately, you can achieve this and save money in the long run by following these practical tips. You can also seek assistance from experienced tax professionals like us to get the help you need.

If you are looking for skilled accountants in Caloundra, reach out to SMB Accounting. We offer a range of accounting services, and you can reach out to us through in-office appointments, phone interviews, or online submissions. Contact us today!

Technology has made it possible for processes to be a lot easier these days. There are new ways to keep track of your small business’s progress, including your accounting. Online tools like Xero have made accounting and bookkeeping so much easier. They allow you to access your financial information and reports at any given time and provide insight into where you stand. Here are the benefits of utilising Xero for your business:

The Benefits of Using Xero for Business Accounting

1 – Xero is Convenient and Easy to Use

Conventional accounting software used to be challenging to understand and use, so much so that only accountants had the time of day to understand them for you. With Xero, you can check things easily on the cloud and maneuver your way through your numbers. Business owners and accountants alike benefit from this convenience. Its tools also make reporting and creating invoices quick and convenient. It can be accessed even when you’re on the go!

2 – Xero Keeps things Transparent For Your Business 

Numbers don’t lie. When everything is transparent, you can conduct business much better, knowing your spending and what affects your profits most. With this accounting tool, you can determine if you can afford certain expenses. It can also show you what your habits are like and help you figure out what to cut back on.  

3 – Xero Makes Data Interpretation Easy

With automated reporting systems in place, data interpretation becomes much faster. Old accounting software made things that only accountants can understand, thus giving them the need to produce their own reports that were easier to understand. Automated reports take away that task from them. They tell you exactly what you need to know without having to meet or call your accountant. 

Do I Still Need an Accountant with Xero?

While this application does make things much more convenient, it still takes time to input the numbers and track the receipts. While Xero makes things more manageable, it still doesn’t eliminate the work. If you want to get rid of accounting tasks on your calendar entirely, get an accountant that can use this accounting software.

Having an accountant takes the work off your shoulders to focus on other aspects of your business. Most accountants will ask you to get this application so that you don’t have to call them for status updates. Your files will be safe and updated. Business can go on as planned.

Conclusion

Accounting is complex and requires an organised mind to keep things in check and order. Xero makes processing your financial figures and simplifies the work for you. It puts everything in the cloud, so you’ll never lose your data. But if more accounting tasks need handling and you have no time to manage your Xero account, you can always find someone to handle it for you.

Are you a small business looking to get their accounting straight? Perhaps it’s about time to consult one of the best accounting firms along the Sunshine Coast. SMB Accounting can handle your Xero account and help you with other bookkeeping tasks so you can focus on more critical aspects of your business. Contact us now!

If you have been claiming tax deductions even when you don’t have a receipt, you should be aware of the possible repercussions because of the stricter rules set by the Australian Taxation Office (ATO). However, there may still be instances when it is acceptable to do so.

When you want to improve your tax refund, tax deductions may be the best way to do it, and these make the tax system fairer in a way. The idea is that if you spend money on something that is connected to how you make a living, you can get a refund for that. 

For you to better understand this all, your trusted small business accounting experts will break it down for you in this article:

What Does the ATO Say About It?

According to ATO, if you purchased work-related items but you were not able to keep the receipt for that purchase, you can still claim up to $300, which is the maximum value.

But what if you spend more than $300? You may still be eligible to make a claim, but with no receipts, there’s always a possibility that you’ll be denied.

Can You Claim Food Expenses Without Receipts?

You should know that under normal circumstances, you are not allowed to make deductions for regular living expenses. The only exception is if your work situation obliges that you eat in your company café and you cannot come home to eat. And even then, you do need your receipts to make deductions.

Why Do You Need to Keep the Receipts for All Your Expenses and Purchases?

As tax time draws near, Aussies typically start preparing for their refund by collecting their receipts and other records that they can use to get their deductions. Any tax consultant will tell you that the easiest way you can get the ATO to approve your deduction is by presenting them with receipts.

Indeed, it is not always possible to get receipts, and the ATO understands that. Still, if you want to get refunded, you need to be able to show them how you were able to come up with the total amount of deductions. As such, you have to present them with proof like bank statements or whatever is appropriate. 

Some examples of expenses that you may not be able to get receipts for include work-related expenses for your car, costs of uniforms, and more. Phone calls, training, travel, and more are also some work-related expenses that you can get a refund for. 

Again, you can still get your deductions without a receipt, but you cannot get more than $300.

What Specific Expenses Can You Claim Refund For? 

One of the things you can get a refund for is travel expenses. However, you should know that your daily commute to and from work does not count as a travel expense. However, if you get asked to attend a conference in the next town, then you can add that travel cost to your deductions.

If you pay for your uniform, and it’s specific to your job, then you can claim that amount as well. Furthermore, you can also claim the cost of the required courses that you had to take.

What Expenses Are Considered Allowable?

For an expense to be allowable, you should be able to answer the following questions with a “yes”:

  • If they’re directly related to or needed for your occupation
  • If you paid for them yourself
  • If your employer did not reimburse you

Conclusion

There is no assurance that you will be granted a refund without receipts. For this reason, as much as possible, you must always collect those receipts so that you can present them to the ATO. While you may be allowed to get a refund for a limited amount when you don’t have the receipt, it is never assured.

If you have more tax-related questions, SMB Accounting is here for you. You can speak to our tax professional in Australia so that you can learn more about deductions and other tax-related matters!