BEST IN BUSINESS: The Australian Tax Office is streamlining tax time for small business.
BEST IN BUSINESS: The Australian Tax Office is streamlining tax time for small business. seb_ra

Helpful hints for business

THIS tax time, the ATO is making things easier for small business. Whether you use a registered tax agent or manage your own tax affairs, the ATO has a range of tips to help you get it right.

Include all your income

It is important to make sure you declare all your cash and online sales in your tax return. Your income may also include money you have earned from participating in the sharing economy.

If for example, you are renting out a room, a car parking space, doing odd jobs such as delivery or cleaning for a fee, remember to include this income in your tax return.

Don't miss out on deductions

The ATO wants small businesses to claim what they are entitled to - no more, no less.

You can claim tax deductions for most costs you incur while running your business.

You can generally claim operating expenses, such as office stationery and wages, in the year you incur them.

However, you typically claim capital expenses, such as buildings, machinery and equipment, over a longer period.

If your home is also your place of business, you can claim income tax deductions for a portion of the costs of owning, maintaining and using your home for this purpose but you must have an area set aside exclusively for business activities.

If you just use facilities in your home to run your business, then you may be able to claim a portion of running costs such as business phone costs, decline in value of furniture plus the costs of cleaning, heating and cooling.

There are some important exceptions - you cannot claim deductions for private or domestic expenses.

You should be aware that entertainment, fines and some other expenses are also specifically excluded from business-related deductions.

You must also keep accurate and complete records of all the assessable income and business deductions you claim.

Check personal services income

If you are self-employed and paid mainly for your personal efforts, skills or expertise, you may be earning personal services income.

The new personal services income tool will help you work out whether your income is personal services income and whether special tax rules apply. If the special tax rules apply to your personal services income they can affect the deductions you can claim and how you report your income.

Lodge on time

If you are a small business and preparing your own return you must lodge by October 31. If you are using a registered tax agent they will have different lodgment dates. If you are using a tax agent for the first time or using a different tax agent you need to let them know before October 31. If you have employees, you should lodge the PAYG payment summary annual report to the ATO by August 14 each year.

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