From a tax perspective, a small business is defined as one with an annual turnover of less than $10 million. Small businesses are one of the sectors, who are facing difficulties while tax preparation, due to highly unorganized records and do not have a special employee to look after-tax filing.
Here, we tried to give a little clarity to the small business owners regarding their tax.

Tax Tips for Small Businesses:

  1. Avail Immediate Asset Write-offs/maximize depreciation deductions
    As Per the government’s taxation guidelines, small businesses are eligible for instant asset write-offs for capital assets up to $30,000. In this manner, a company can gain much-needed capital assets and get the deductions against the profit at the same time.
  2. Keep the financial data organized
    One of the most important points to file taxes in an efficient manner. Is to keep all the relevant data and records updated and organized throughout the year.
  3. Know your deductions
    There is a list of tax deductions small businesses are eligible to.
    • Expenses on business vehicles
    • Business travel-related expense
    • Work from home (if the business is from home)
    • Depreciation on assets
    • Theft and insurance, Worker’s Compensation
    • Repair, replacement and maintenance of the assets like machinery
    • Employee salary payments, Super Contribution
    • A sole Operator adding to his Super, can claim
    • Any business-related expenses, which cannot be reimbursed including hiring an accountant, Advertising and sponsorship to promote products or hire staff
  4. Income Tax Offset
    If a small Business’s revenue is less than $5 million, it is eligible for around $1000 off on its tax bill. Such offsets save micro-businesses from high-income tax.
  5. Small Business CGT Concessions
    There is significant capital gains tax savings potential for small business.
  6. Write off Bad debts
    Business should review outstanding debts to assess their likely recoverability with a view to identifying genuine Bad debts which could be written off for tax purposes.
  7. Job Keeper
    Job keeper Payments are assessable, and you can claim deductions of the payments made to employees and business participants.


  1. GST AdjustmentBusinesses may have had contracts cancelled or had to cancel sales or refund purchases due to the impact of COVID-19. As a result, GST adjustments may be required.
  2. Defer income
    During tax time business should aim to minimize income and maximize expenses in order to reduce assessable income and tax. To do this, it is best to use the accrual accounting method.


  1. Bring forward expenses

It is advisable if you think that you have a good income this year then make maximum deductions within the law to reduce tax liability. For e.g., purchase all consumables before 30 June of the current FY, for the next financial year to avail the deductions.

  1. Small Business Concessions – Repayments
    Taxpayers can make repayments (up to 12 months) on expenses such as loan interest, rent, subscriptions before 30 June to obtain a full tax deduction in the current financial year.
  2. Year-end stock take
    If applicable, try to do a detailed year-end stock take as tat 30 June to write off any obsolete or worthless stock items.
  3. Tools of trade/ FBT exempt items
    If structured correctly, the employer will be entitled to a tax deduction for the reimbursement payment to the employee (for the equipment cost) and claim any GST on it.
  4. Pre-paid expenses
    A small business can get an immediate tax deduction for certain pre-paid expenses that were made before the end of the financial year.
  5. Pay super
    If you have staff, then make sure to pay their super before 30 June, to get the deductions this year and make sure to pay super to yourself too.
    Overall, if you know that next year you are going to drop or increase income for any reason, you might want to look at the timing of the deductible tax expenses to minimize the tax liability this year as well as next year.

In doubt?
Too much confusion? Do not worry. At Business Mantra our excellent team of Tax accountants will help and solve all your queries and give you the best solution to save your money

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