You may be able to reduce your tax bill if you are eligible for concessions, such as immediate deductions for prepaid expenses, or save time by estimating the value of your trading stock instead of doing a stocktake.
Remember to include all your income in your tax return, including cash, coupons, EFTPOS, online, credit or debit card transactions, and income from platforms such as PayPal, WeChat or Alipay. You may also have income from business assets, other business activities or capital gains.
Generally, grants or support payments from the government are taxable and need to be included as assessable income in your tax return, unless they are specifically made non-taxable. You don't need to pay tax on some COVID-19 payments you receive from the government to support businesses.
Know what deductions you can claim. The ATO updates their small business tax time toolkit by July every year, which includes fact sheets on common expenses, so keep an eye out for the 2022 toolkit.
If your business makes a loss, you can generally carry forward that loss and claim a deduction for your business in a future year. How you can claim a tax loss depends on your business structure. The ATO’s loss carry back tool can help you work out if you’re eligible to claim the loss carry back tax offset, and the maximum amount you can choose to claim if you’re eligible.
It’s important to understand what records you need to keep, and that they are complete and accurate. You need to keep most records for five years, store them in a safe place, and they must be in English (or easily converted to English).
Resources are available to help support you in difficult times – whether you are affected by COVID-19, a natural disaster, mental health and wellbeing struggles, or financial hardship.
You can also contact the ATO or your registered tax professional if you need some extra help with your tax and super affairs.
For more information on tools and services to help make it easier for you to get your tax and super right, visit ato.gov.au/SBsupport
