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Small business BAS tax deadlines on the 28 October, 28 February, 28 April and 28 July seem to always creep up on us, which means we need to ensure that all of your tax affairs are in order.

The best way to make sure all of your small business tax information is accurate and submitted on time is by making record keeping a part of your daily business routine.

Keep reading to learn beneficial tax tips for small businesses, including how to optimise your business’s record-keeping strategy.

Understanding the Basics of Small Business Taxes

As the year comes to a close, a critical tax deadline is the 28 October business activity statement (BAS) deadline. As a business owner, it is on you to correctly report your income, claim your expenses, and have appropriate records filed with the ATO.

It’s important to make sure you meet the BAS deadline and that all your information is accurate if you want to avoid financial and legal penalties from the ATO. If you are unsure of how to go about this, hiring a certified tax agent is a good start. A tax agent will do most of the leg work when it comes to filing small business taxes and the BAS as long as you’ve been on top of your record keeping.

What Is a Business Activity Statement?

Many small Australian businesses will need to complete business activity statements to report their taxes and make payments. Around two weeks before the end of your reporting period, the ATO will send you your BAS. You must complete and return it by 28th of the month quarterly deadline along with any payment to avoid penalties. Your BAS can be lodged through a tax or BAS agent, online, by phone, or by mail, making the process simple for everyone.

Your business activity statement can be used for filing reports such as:

1. Good and services tax (GST)

2. Pay as you go (PAYG) withholding and instalments

3. Fringe benefits tax (FBT) instalments

4. Win equalisation taxes

Tips for Meeting the ATO Tax Deadlines

The ATO requires all businesses to keep records of every transaction that has to do with small business tax and superannuations. This means your documents have to contain enough information for them to determine the purpose of the transaction, which includes the transaction’s date, amount, character, relevant GST information, purpose, and the relationship between the parties. Not only does the ATO require sufficient record-keeping, but it will also assist you when it’s time to lodge your business taxes and submit your BAS.

If you want to meet the record-keeping requirements and avoid mistakes, you must know what records you need to keep track of and make record-keeping a habit. When you dedicate time and energy to keeping accurate small business tax records, you will easily meet your tax obligations and deadlines.

When keeping your records, make sure to:

  1. Record cash income and expenses
  2. Account for personal drawings and use of company money or assets
  3. Record goods for your own use
  4. Separate private expenses from business expenses
  5. Keep valid tax invoices for creditable acquisitions when registered for GST
  6. Keep adequate stock records
  7. Keep sufficient records to substantiate motor vehicle claims

Final Thoughts

The ATO is cracking down on businesses and contacting companies about their income and expense claims. They now look for discrepancies in returns when they compare them to pre-fill data or benchmarks, and they have increased their recourses to deal with the cash economy. If you didn’t make record-keeping a part of your practice before, you need to now. Otherwise, the ATO may hit you with legal and financial penalties.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Please consider whether the information is appropriate to your circumstance before acting on it and, where appropriate, seek professional advice.