The Ultimate Tax Checklist for Small Business Owners

Managing taxes can be stressful for small business owners. With so much to handle, such as tracking expenses and meeting deadlines, having a clear checklist is essential. It not only simplifies the process but also ensures compliance with Australian Taxation Office (ATO) regulations, helping you avoid costly mistakes.

This tax checklist from Ausfirst Lending Group helps Australian small business owners stay on top of their tax obligations. It covers everything you need to know to manage your taxes effectively and with confidence.

1. Register Your Business and Stay Compliant

Setting up your business correctly ensures you meet tax obligations and avoid unnecessary penalties. Here’s what you need to get started:

Have an Australian Business Number (ABN):

An ABN is a unique business identifier essential for issuing invoices, claiming GST credits, and managing transactions smoothly with the ATO. Without an ABN, other businesses may take tax out of your payments at a high rate. You can register your ABN online through the Australian Business Register.

Confirm Your Tax File Number (TFN):

Your TFN is what connects your business to the tax system. If you’re a sole trader, you can use your personal TFN, but if you run a partnership, company, or trust, you’ll need a separate business TFN. Having the right TFN ensures your taxes are handled correctly.

Register for GST (if required):

If your business makes $75,000 or more per year, you need to register for GST. This means you’ll charge Goods and Services Tax (GST) on your sales and can also claim back GST on business expenses. Even if you don’t reach the threshold, you can still register voluntarily if it benefits your business.

Register Your Business Name:

If your business name is anything other than your personal name, you’ll need to register it with ASIC. This keeps your business legally recognised and helps build your brand identity.

2. Manage Your Income and Expenses

Tracking your income and expenses ensures accurate tax reporting and helps you claim deductions. Here’s how to stay organised:

Track All Business Income:

Keep a clear record of all business earnings, including sales, service payments, interest, and rental income. Organising your income properly ensures accurate tax reporting and better financial management.

Organise Your Expenses:

Categorising your expenses simplifies tax time and maximises deductions. Common deductible costs include travel, office supplies, marketing, employee wages, superannuation, and utilities like phone, electricity, and internet. Keeping clear records ensures accurate reporting and financial efficiency.

Use Accounting Software:

Cloud-based accounting software helps track income and expenses while also generating reports, connecting with bank accounts, and ensuring compliance with tax requirements.

3. Claim Your Tax Deductions

Reducing your taxable income starts with claiming the right deductions. Make sure you’re not missing out on these key tax-saving opportunities:

Deduct Business Assets:

Claim the cost of equipment, machinery, or other business assets as a tax deduction. If eligible, the instant asset write-off scheme lets you deduct the full amount upfront, reducing your taxable income.

Claim Home Office Expenses:

If you work from home, you can claim a portion of your expenses for electricity, internet, rent, and even cleaning costs. Use the ATO’s fixed rate method or actual expense method for accurate claims.

Deduct Vehicle Expenses:

If you use your car for business, you can claim fuel, maintenance, and other costs. Keeping a logbook or using a simple per-kilometre rate helps you get the most out of your deduction.

Take Advantage of Small Business Concessions:

Familiarise yourself with incentives like the Small Business Income Tax Offset, which reduces tax payable on your business income by up to $1,000 annually. Checking what applies to you can lead to valuable savings.

4. Keep Accurate Records

Keeping good records makes tax time easier and helps you stay compliant. Follow these simple practices to stay organised and prepared:

Retain Financial Records for at Least 5 Years:

Proper record-keeping is important. Retain invoices, bank statements, and receipts for at least 5 years to comply with ATO requirements. These records can also serve as proof for deductions if audited.

Store Your Records Digitally:

Going digital keeps your records secure, organised, and easily accessible. It also simplifies tracking your cash flow, managing expenses, and generating reports, making tax time much easier.

Check Your Bank Statements Every Month:

Reviewing your bank statements regularly helps ensure your income and expenses match your records. It also allows you to catch errors or missing transactions early, keeping your finances accurate and up to date.

5. Manage Payroll and Superannuation Obligations

If you have employees, meeting payroll and superannuation obligations is a must. Ensure you’re paying the right amounts and staying compliant.

Register for PAYG Withholding:

If you have employees, you are responsible for withholding tax from their wages and paying it to the ATO. This ensures your employees meet their tax obligations while keeping your business compliant.

Pay Superannuation Contributions:

Make super payments on time, currently set at 11 per cent of your employee’s earnings. Late payments can lead to penalties, so staying on track is important. Using SuperStream can make the process easier.

Keep Track of Super Deadlines:

Super payments are due every quarter, and PAYG summaries must be submitted to the ATO on time. Setting reminders or using a tax calendar can help you stay on schedule and avoid penalties.

6. Lodge Your BAS (Business Activity Statement) on Time

If your business is registered for GST, you must submit a Business Activity Statement (BAS) to report your tax obligations. Submitting your BAS accurately and on time helps you avoid penalties and keeps your tax records up to date. Follow these steps to simplify the process:

Know How Often You Need to Lodge

Your BAS lodgement schedule depends on your GST registration. Businesses with higher revenue may need to lodge monthly, while smaller businesses usually lodge quarterly. Check your ATO requirements to stay on track.

Report All GST Collected and Paid

Ensure your BAS includes GST charged on sales and GST credits for business purchases. Keeping accurate records of transactions helps you claim the correct deductions and avoid errors.

Meet BAS Deadlines

BAS is typically due 28 days after the end of each quarter. Submitting late can result in penalties and interest charges, so mark the deadlines on your calendar and set up reminders.

Use Online Lodgement Tools

Submit your BAS easily through the ATO Business Portal or accounting software. Online lodgement helps you calculate GST, reduce errors, and keep your records organised for a smoother process.

7. Prepare for End-of-Year Taxes

The end of the financial year is an important time for businesses. Preparing early helps ensure a smooth tax filing process and reduces the risk of errors or penalties.

Know the Australian Financial Year:

Australia’s financial year begins on 1 July and finishes on 30 June the following year, so it’s best to start tax preparation as soon as the year ends. Organising your records early gives you time to review income, expenses, and deductions before the lodgement deadline.

Report All Income:

Make sure you include all sources of income, not just sales. This includes interest earned on business bank accounts, government grants, and any other revenue streams. Incomplete reporting can lead to audits and penalties.

Review Your Deductions:

Only claim deductions that are directly connected to your business activities. Review your expenses to maximise savings while staying compliant. Keeping clear records ensures a smooth tax process.

8. Mark Important Dates and Deadlines

Failing to meet tax deadlines can result in penalties and cash flow problems, making business management more challenging. Stay organised by adding these key dates to your calendar and setting reminders in advance:

BAS Deadlines:

Your Business Activity Statement (BAS) is usually due 28 days after the quarter ends unless you lodge it monthly. Timely lodgement helps you stay compliant and avoid late fees.

Superannuation Deadlines:

Super contributions for employees must be paid by the 28th of the following month after each quarter. Late payments may attract the superannuation guarantee charge (SGC), so it’s important to plan ahead and process payments on time.

Income Tax Return Deadline:

For most businesses, the deadline for lodging an income tax return is 31 October each year. If you work with a registered tax agent, you may be eligible for an extension, giving you more time to prepare.

9. Work with Professionals

Expert guidance can help you save on taxes, stay compliant, and manage your finances effectively. Partnering with the right professionals ensures your business is financially secure and tax-efficient.

Consult a Tax Agent or Accountant:

A tax agent or accountant ensures you claim the right deductions, meet ATO requirements, and plan your taxes effectively. Make sure they are registered with the Tax Practitioners Board (TPB) for credibility and compliance.

Work with a Finance Broker

While they don’t handle taxes directly, brokers help SMBs secure business loans improve cash flow, and structure loans tax-efficiently, ensuring eligibility for interest deductions, depreciation, and GST credits where applicable.

Review Your Tax Strategy Annually:

Tax laws and financial needs change. Regularly reviewing your tax plan with an accountant and loan structure with a finance broker ensures you stay compliant, minimise liabilities, and optimise cash flow.

Need help managing tax payments? Contact us today and let our finance brokers find the right funding solution to keep your business on track!

10. Avoid Penalties and Stay Compliant

Managing taxes is part of running a successful business, and Ausfirst Lending Group is here to help you stay on top of your finances. By following this checklist, you’ll have everything under control. Whether it’s tracking income, claiming deductions, or lodging BAS, staying organised and proactive is the key to success.

Strong finances start with smart tax management. Stay organised, reduce liabilities, and keep your business on the path to success. Contact us today to take control of your taxes!