The 30th of June is fast approaching, and with it comes the end of the financial year. End of financial year sales have become very popular for good reason. You can claim certain purchases made before June 30 as a tax deduction if they’re related to earning your income. For tradies or small businesses, this is great news. You can save on paying tax while getting the best gear for all your painting needs.
Why is the end of financial year important?
The financial year is a 12 month time period that is used for tax purposes. In Australia, the financial year ends on the 30th of June and the next financial year begins on the 1st of July. During the period of 1 July to 31 October, individuals and businesses are required to submit a tax return to the Australian Taxation Office. The ATO then uses this information to determine how much taxed is owed to the government, or if reimbersement is due if more tax has been paid than required. The end of financial year is an important time for business to get their finances in order and ensure they get the best possible tax return. This period is a great time to catch sales as business often clear their stock to make room for new items.
Why should I spend money before the financial year ends?
Since the EOFY is approaching soon, it’s the perfect time to get all your paint and paint accessories gear! If you’re a small business, spending money now has many benefits. EOFY sales not only give you a discounted price tag, but also give you the ability to claim some of the purchase price as a deduction on your tax return. Everyone has to pay tax. As a small business, spending a portion of your profit before the EOFY will help you pay less tax. The general rule is that items that are $300 or less can be claimed in full as an immediate deduction, whilst items over the $300 threshold can claim depreciation over the lifespan of the item.
Look around at your equipment. There’s a good chance that at least some of it is old or broken and needs to be replaced in order to keep your business up and running. EOFY is the perfect time to do just that. In fact, a common tactic is to make last minute work expenses in June so you can claim them as tax deductions in July. Although you should avoid making unnecessary purchases just for the sake of the tax deduction, it’s the best time to get the equipment you require! Choose equipment that will help your business to run more efficiently, attract new customers, or allow you to develop new offerings.
Tax deductions are designed to make sure that individuals and businesses aren’t taxed on items and expenses directly related to earning an income. The good news is that it allows you to buy an item at a reduced price and claim a deduction.
How do I complete a tax return?
Before you complete your tax return, you need to gather, organise, and reconcile your financial records. After that, you can use these figures to generate the financial reports which gives you the information you need to fill out your tax return. The main reports are a profits & loss statement and a balance sheet. A profits and loss statement shows your total income and expenses for the year while a balance sheet lists your business’ assets and liabilities to work out your net assets.
What else should I do before EOFY?
Get up to date with your record-keeping tasks
One of the most important tasks involves getting up to date with your record keeping. This may involve conducting a stocktake, creating a profit and loss statement, lodging your income tax returns, and meeting superannuation requirements. Superannuation is not tax deductible until it is paid, so completing all superannuation payments before the EOFY can help you reduce your income tax bill.
Find out what tax deductions you can claim
You can claim most business expenses as long as they directly relate to earning your income. To claim expenses as business deductions, make sure you have records to prove it. You may be able to claim deductions if your business:
- Has a website
- Has motor vehicle expenses
- Has travel expenses
- Uses machinery, tools, or equipment
If you’re claiming as an individual, you can also claim work-related expenses. However, you must have spent the money yourself and you must have a record of these expenses. Types of work related expenses may include:
- Vehicle and travel
- Clothing, laundry, and dry-cleaning expenses
- Home office expenses
- Self-education expenses
- Tools, equipment, and other assets
- Other work related deductions
Be careful of tax refund scams
Around tax time, small businesses may find themselves the target of tax refund scams. Its important to be aware of these in order to protect your business from being affected. There are two most common tax time scams:
- Tax refund scams
A scammer tells you that you’ve overpaid your taxes and are eligible for a refund. However, in order to receive this refund, you have to transfer an administration fee.
- Tax owed scams
A scammer claims you’ve underpaid your taxes and will ask for your credit card details or ask you to purchase iTunes cards and send them the details.
Review your finances
To help manage your finances, you may want the help of an accountant or bookkeeper. Identify whether or not you’ve met your targets, and what to do differently next financial year. It’s also a good idea to create a cash flow forecast to manage any potential shortfalls and ensure you can still pay your staff and suppliers.
Review your business and marketing plans
This is also a good time to set yourself up for the year ahead. By regularly reviewing and updating your plans, it can help you to:
- remember your goals and priorities
- assess whether your strategies are working
- adapt to any changes in your environment
- make the most of new opportunities as they come your way
- prioritise and maximise your effort
Save on great gear with PaintAccess’ EOFY Sale
Our EOFY sale allows you to save 20% on the best products for your business! Take advantage of the EOFY and invest in some great gear that will benefit your business for years to come. We’ve gathered all the best products at the best prices. Here are just a couple of our great offers. Get in while you can - these discounts are only valid until the 30th of June!
Our 90L dehumidifier solves your paint drying issues by speeding up the drying process and saving you time and money. Designed for professional painters, the dehumidifier can remove up to 90L of moisture per day. Its sturdy and mobile design means that you can easily transport it around worksites to wherever you need it. Also featuring digital controls and timer settings, its float operated pump removes collected moisture.
The Nix Pro 2 is a revolutionary tool which brings colour matching to a new level. Colour matching is made so easy for professionals; measure any surface colour and match to the existing library of popular brand fandecks. Import your own custom database for reference. Export colour data, conduct colour comparisons, convert between colour systems and more! Match items to an existing paint colour or let NIX Mini suggest colour schemes. Save & share with clients.
The Graco Ultra 1095PC is specially designed to provide all-day comfort and control. It is the lightest weight gun in its class, meaning you can easily transport it to and from worksites with no hassle. It also features a complete no-tools gun rebuild in seconds with ProConnect cartridge. With its Durable Endurance Piston Pump, you’ll be able to spray for longer.
Mirka is a leading provider of dust-free solutions and offer dustless tools suitable for all your sanding needs. Their products are high-quality and ideal for a range of needs such as construction or painting purposes. Prolonged exposure to dust can be harmful for your health, and the Mirka Dust Extractor is the perfect solution.
The DE1230 M Class features a triple filtration option when used with HEPA filter and fleece dust bags. This M Class filtration model is equipped with an automatic filter cleaning system (AFC). The Mirka® Dust Extractor 1230 M AFC is equipped with a high-performance 1200 W motor and a 1-stage turbine that creates 250 mbar suction with an airflow of 4500 l/min. It also includes the auto-start function.
Quality masking tape is a must-have for every tradie. Most popular masking tape in the painting Industry, IQuip’s 30-Day Envo Masking Tape offers an unbelievable clean edge and 30 days clean removal!
iQuip’s 30-Day Envo Masking Tape offers all the best features:
- 30+ Days UV Reistant & Waterproof
- Razor sharp paint lines
- Clean release - no residue
- Strong adhesion
- Use with all paint types
- No paint bleed