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tax tips from creative small-business owners
Rebecca and Jessica Stern from Mustard Made

tax tips from creative small-business owners


How to make life easier for yourself come tax time.

All right! You know what time of year it is, small-business pals. Yep, it's the run up to tax time! If you have an ABN, you'll be reviewing your business and personal income very shortly, and may need a little help from those who've been there before. Those who run a company or trust have a different tax lodgement day. Nonetheless, the pearls of wisdom below – passed down from accountants to small businesses and put into practice over the years – might prove helpful to just about anyone who runs their own show.

The best tax advice my accountant gave me...

1. Pay yourself superannuation! This is easily forgotten without an employer sorting it out for you every week, but it's super-important to make sure you have some funds set aside for retirement. Plus, there are plenty of companies coming up now that are doing good things with your money, so you can feel safe knowing your investments are helping great industries like sustainable energy.

2. Get yourself an automated invoicing program. Chasing money is never fun! A program takes the troubles away and you can just sit back and let it do all the work!

3. Create a separate bank account for all your business expenses and income, and pay yourself a wage out of it weekly or monthly. It makes for easy reconciliation at the end of each year and there’s no need to sort through a bunch of different account statements.

1. If you have multiple super funds, roll them into one preferred fund so you aren't paying multiple premiums and fees. Sole traders and freelancers can make contributions to their superannuation, which they can also claim on tax by filling out an ‘intent to claim’ form with their super fund.

2. Put tax money aside after every sale or job, so you have the amount ready to pay come tax time. Same for superannuation. Working out how much tax and super you need to put aside from a job can help you to figure out how much you should be charging. 

3. Having an accountant or bookkeeper is worth its weight in gold and takes the anxiety out of tax time. When choosing an accountant, go with someone who takes the time to explain things to you.

1. Have a good accountant from the start! I had an accountant who advised me that I couldn't claim any expenses until my business earned more than $20,000 in a tax year. For someone who was just starting out at the time, that was a large amount of sales just to be able to claim my expenses on setting up a website, raw materials and manufacturing costs. And this is NOT true! You can claim your expenses even if your business is not earning any income yet (as long as you have an ABN).

2. Use an accounting software. I am pretty old-school and tracked my expenses with an Excel spreadsheet. However, I've gotten onto Xero and it is life-changing. You can take a picture of a receipt and the software stores it automatically so you won't have to think about it again. So good!

3. Expenses cannot roll over into the following tax year so make sure you claim any expenses on your business within the same tax year.

1. Have aces in their places. Surround yourself with people, tools and systems (aces) that are more efficient than yourself – they will make what you do easier and give you the time to focus on what you’re best at.

2. No question is too small or too silly! Don't be afraid to ask for something to be explained many times if you have to. 

For more helpful small-business stories, head to Strictly Business.