EOFY18 Tax Return Tips
EOFY18. The 2018 tax year has just finished and regulatory reporting is just beginning with tax returns, financial statements, payroll tax and more. At PMW we’re looking forward to getting all that sorted for you.
This is a big post dedicated to getting you organised and on your way.
Completing your records
Receipts and recording
Every claim, every transaction, every assumption must be recorded one way or another to ensure the item is proved, is accurate and is relevant to your financial and taxation reporting. This guide will highlight some of the actions necessary to get you underway for:
- Individuals
- Businesses
What you remember today may not be remembered tomorrow. So…Why wait until tomorrow.
We invite you to get started now, and if you have questions then of course we are just a phone call away.
Individuals
We have a detailed checklist for you to download and complete on our website. When we are ready to commence your return, just supply it to us. It will be an excellent precursor to delivering our service.
Please follow this link to go direct to the Individual ITR form.
The document will ask you – PAYG summaries, Health Insurance Statements, Dividend Information, Receipts for expenditure (by category).There are even some basic tables that can be completed as well. In relation to gathering records here are some tips:
Banking
Access your bank records online and it should provide you with total interest earnings and charges on accounts and loans. This can typically be printed or saved as a csv or excel file and sent to us.
Shares and Investment
Dividend statements, contract notes for buy and sells, trust distribution notices are best just to be given to us ,or if you would like to jump into our financial planning then investment summaries are just part of the service.
Rental Properties
If you have property investment then your rental summaries, expense records and detailed repairs invoices for new assets and repairs would be great. Our new product My Prosperity will in the future be the best rental property tool you ever had but in the meantime the information form on our site will provide a good directive of what you need to provide.
Motor vehicle
The most common item of expense to claim and involves running costs, depreciation, interest and insurances. Some expenses such as fuel and oil are claimed using an estimate using the make of your vehicle and the kilometres travelled. Make sure have a log book less than 5 years old and provide an estimate of your annual business or work related distance travelled and we will work it out from there.
Make sure you get the odometer reading for your vehicle at 30 June as soon as possible.
If you don’t have expense receipts it may be best to just claim on a kilometres travelled basis assuming you have a deductible purpose.
Working from Home
If you work from home, as a minimum, please provide us with an estimate of how many hours you work per week from home and what items of equipment you may use. For more detailed home use patterns it is best to speak to us for guidance.
Things you may have purchased
Computers, printers, modems, other electronic devices, tools of trade, vehicles etc – simply provide the invoice, receipt or contract and some detail on why you bought it and how you paid.
Download the Home Office Expenses Guide
Business
These actions do not override any essential planning strategies. These are to ensure you are ready to close the year, start a new one based on a good line in the sand, and finalise that regulatory reporting.
If you have bank reporting, let us know straight away. Banks assess you on how effectively you meet your obligations and annual reporting is a crucial one. Making sure everyone is on target to deliver is not something to be left to the last minute.
Knowing the turnover of all your businesses, is important for us both as the rules may change if the combined revenues are big enough.
Bill it, collect it
The lifeblood of a business is earning and getting paid for its goods and services. For retailers this is relatively easy but for services, construction and progressive supply businesses income recognition, measurement and close off is crucial.
- Close the tills
- Review the work complete, or is at a progress billing stage
- Get it billed
- Process credit notes and cliams
- Get your progression stages and profit recognition right and tight
- Evaluate potential losses and claims
- Evaluate the collectability of work in progress, and be conservative
- Close complete jobs
- Make sure those bad debts have been properly written off
- Reconcile your ledger to the trial balance
Stock is more than raw material and finished goods
- Stocktaking is essential to measuring what has been spent but not yet sold. This should be done now if stock is more than $5,000.
- Raw materials and finished goods are a crucial part of stock and so often work in progress is the poor cousin with few businesses having any way of assessing it, yet, it could be one of the biggest numbers in the financial records. Call us to discuss what to do here as it needs some specialised attention.
- Identify slow moving or scrapped items and write them down to a recoverable amount
- Ensure your costs of production are included and you know what your terms of trade are, to ensure stock movements are correctly dealt with.
Creditors and other expenses
- Creditors must be processed before approval
- Claim all credit notes (immediately every time)
- Close creditor recognition at 14 days post end of period to allow for as many as possible
- Review expenditure patterns and recognise creditors not yet received or billed (an accrual)
Wages & payroll
- Ensure all wage categories and deductions have been identified and correctly set up
- Reconcile the PAYG summary data to the trial balance
- Ensure FBT reportable benefits are known
- Prepare PAYG Statements
- Prepare Contractor Schedule of Payments
- Complete Payroll Tax Reports if required
- Lodge Annual Records
- Roll the payroll year
- Ensure you are Single Touch Payroll ready (20+ employees)
The bank function
- Process all transactions via feeds or manually
- Review outstanding cheques and deposits for aging and potential cancellation and re-issue
- Process all unclaimed monies
- Reverse all suspended expense payment runs
- Reconcile bank
And finally…
Depreciable assets, finance arrangements and miscellaneous balances can be closed later however please supply copies of invoices of documents for new assets, sold assets and new or completed finance arrangements. these will be processed as part of the year end function.
Download the Business Questionnaire
Audit Insurance
Protection against regulatory reviews
A lot of change is occuring with technologies, and the information sharing between businesses and the government agencies is massive and will go a big step further with single touch payroll and the need to fund new budget promises. Any business and individual with interests other than as a salary and wage earner will at some point in the near future be involved in some form of review program. Yes there are many forms of review with the desk audit being one of the most invasive and hence, costly.
We have arranged for audit insurance to be available to our clients and we urge you to consider this. Please be assured while it has a cost this particular service is a non profit making service we at PMW Accountants & Advisors provide. This is done to provide you with the potential to protect you against costs of dealing with and defending actions by state and federal regulators.
Ask us about further details now.
Single Touch Payroll – Final Call
For employers with 20+ employees
It is finally here and for any employer with less than 20 employees your turn will come next year unless you volunteer to report under the current regime.
- Employers will now report payroll and superannuation information direct to the ATO via Xero, MYOB and other accounting system or payroll service providers.
- This is done on a real time basis, i.e when you run the payroll
- This information can be updated at a later time via an update process
- There is a 12 month no penalty concession available unless notified that option no longer exists
Bear in mind that, while this concession is available, there can be potential reviews and actions that may cause other investigations to the business and or employees.
It is prudent to actively manage payroll particularly with director and related party amounts to ensure unusual variations do not apply without good reason. We are happy to discuss this further with you.
It is also fair to expect that this regular supply of information is likely to play a significant role in the government managing the massive social security and child support system, this being something employees may have a particular interest in.
The Super Amnesty
The government recently announced an amnesty for employers to catch up on their superannuation guarantee obligations from 24 May 2018 to 23 May 2019. No penalties will be applied during this period and is off the back of the introduction of the single touch payroll system noting that many employers may be adversely affected.
For those employers with cash flow issues this is an important opportunity to rely upon but also to ensure no late payment issues occur in the future as Single Touch Payroll will be the red rag to the bull.
We fully expect the banks financing programs will also look at this information moving forward and we urge all employers to be aware and prepare.
For more information and to discuss your tax plans further, please call us at PMW Accountants & Advisors on 02 6362 1966.