Exactly a year ago, the world faced an unprecedented challenge when COVID 19 pandemic forced several countries to impose strict lockdowns. These lockdowns and economic slowdown activities took a toll on some of the world’s top economies. Some major economies like Australia witness a steep plunge recorded in a century.
In order to steer through these hard times and bring the economy back on its feet, the Australian government has announced changes in the tax legislation.
This major shift in tax legislation has presented incredible amounts of opportunities for small businesses to start putting a smart tax strategy to become tax fit.
Here’s a round-up of some of the strategies that you can apply for this tax season and ensure compliance:
Organising and reviewing your debtors not only allow your business to get paid quicker but also cut down your bad debts. Also, create a recurring schedule to collect debtors to ensure you can maintain a steady cash flow, even during tiring times. In case your debtor is unable to pay, you can write off the amount as bad debt. This will remove that specific amount from the outstanding balance.
Go Through the Depreciation Schedule
Reviewing depreciation schedules play a key role in making your business tax compliant. These schedules break down the devaluation of a company’s tangible and intangible assets. They enable you to keep a track of your assets and their value over a period of time. Most importantly, these schedules allow you to use different depreciation values for tax dedication purposes and monitor the real value of your assets. When you regularly review the tax depreciation, you can claim optimum deductions.
Consider Cash Flow
In uncertain times like the ones we are experiencing, the ability to maximize cash flow is a key aspect. While there are some planning strategies to manage the actual tax liabilities, there are other measures that the ATO has introduced to assist businesses to retain cash during and after COVID 19 or a similar crisis.
Get Professional Advice
Taxation is like a maze, the more you go deeper, the more you tend to get confused. Not everyone is good with numbers, and so it’s crucial to get in touch with professionals who understand the intricacies of tax planning. With the right strategy in place, you can get useful, business-relevant insights that will help you do your business taxes better.