Five smart moves for SMEs to maximise tax deductions this EOFY

If you wish you’d got sorted for the end of the financial year (EOFY) earlier, or are concerned that you’re missing some big tax deductions, don’t worry. You still have time to make small but smart moves that could help minimise your tax liability and set you up for success next year. 

Many business owners aren’t aware that deductions could make a significant difference to their tax refund.

Here are five handy tips that might help you capture all your tax deductions this EOFY.

1. Max out your digital deductions

Whether you’re adopting an e-commerce platform, streamlining operations with cloud-based solutions, or leveraging social media for marketing, you can generally deduct the cost of a new tech tool on your tax return, lowering your overall tax bill. 

So, if you’re considering investing in that new project management software or upgrading your online store, check in with your accountant or financial advisor; now could be a good time for your business.

2. Don’t miss minor expenses 

Small deductions can add up over a year – so don’t miss those minor claims at EOFY. 

For example, people who work outside can generally claim sunscreen and sunglasses as business expenses.

Other easily missed claims include office supplies, memberships of professional publications or groups, and the cost of laundering uniforms or work gear.

3. Consider big-ticket buys 

If you’re planning to buy an expensive piece of work equipment or a vehicle, the end of the financial year could be a good time to make that decision. 

If the federal government successfully passes legislation for its expanded instant asset write-off scheme, businesses with an annual turnover of less than $10 million will be able to claim an instant deduction of the full value of assets that cost less than $20,000. The measure was first introduced in 2015 and then expanded during COVID. It has now been kept as a tax break for small businesses. 

In small businesses, there can be a lot of equipment and other assets that may be instantly written off.  

Keep good records and allocate them clearly so your accountant can deal with them at EOFY.

4. Make the most of smart accounting tools 

Deductions are much easier if you have all your receipts in one place – and it shouldn’t be a shoebox or glove compartment. 

Use an online system so you can record expenses and assign categories as you go for a smoother ride at EOFY. There are options available that eliminate tedious data entry and help keep everything contained in one place.

If you’re not using an accounting platform – or haven’t been utilising the tools you have available – make it a goal for the next financial year. The right software will help you with everything from transaction tracking and cash-flow forecasting to automated bank reconciliations, tax and GST calculations.

5. Talk to a tax expert 

Technology combined with an expert equals success.

The right technology, systems and support from a tax expert can simplify tax prep and make your day-to-day business planning more insightful and effective. 

An accountant or bookkeeper can also help you take advantage of deductions and other incentives that you might not be aware of. Things like large write-off purchases, invoicing big clients before or after EOFY, and pre-paying expenses can all make a real difference to your tax bill. 

It’s important to understand the levers available to help you so you can make the right choices to get the best outcome.

Looking beyond the last-minute tips 

While you can sort out your taxes at the last minute, it’s not the best way to manage your finances. If this year feels messy and rushed, think about what worked, what didn’t and what needs to change next year. 

Then get yourself ready to hit the new financial year running.

Leanne Berry is MYOB’s community relations manager for bookkeepers.