Reduce your tax with our year-end tax planning checklist for small business. The more prepared you are, the smoother the process and the better the result.
(The checklist is based on a 31 March balance date).
March Week 1
Repairs & maintenance planned for April –.Can you bring it forward? You can claim the deduction this year if the work is done by 31 March. Reschedule the work if you will still be able to pay your bills on time.
Deciding whether repairs are deductible or non-deductible is not always clear. Ask us if you’re not sure.
Overdue and bad debts owed to you – Chase them up immediately.
You can deduct bad debts against current year income if you write them off in your debtor ledger before 31 March. Keep records to show you tried to recover the debt before writing it off.
Fixed assets – Are you planning to buy new equipment? You can claim a month’s depreciation if you buy before 31 March. But make sure you will still be able to pay your bills on time.
Sell or scrap furniture and equipment you no longer use.
Stock – Start planning your year-end stocktake to reduce the impact on business operations. Clean and organize your stockroom to make it easy to find and count your stock.
Sell or scrap obsolete stock.
March Week 2
Stationery and canteen supplies Consider topping up before 31 March to claim the deduction this year.
income higher than last year? Talk to us. We will schedule a time in April to prepare draft accounts and calculate if you need to make a voluntary provisional tax payment on 7 May.
March Week 3
Staff expenses – Review planned holiday pay, bonuses, redundancy payments and long service leave. You can deduct these against current year income if you pay them by 2 June.
March Week 4
Bad debts – Write off bad debts in your debtor ledger. Make a note of the details so we can check the GST adjustments.
Stocktake – Do the stocktake as close as possible to 31 March. Write off obsolete stock or write it down to the lesser of cost or market value.
The value of your stock affects your taxable profit. An accurate stocktake helps you make informed decisions about managing your business.
Work-in-Progress – Count work-in-progress at 31 March. Invoice it to customers if your terms of trade allow.
Vehicle Logbook – Check the date of your last logbook. Start a new one if your last one was over three years ago.
Make a note of your odometer reading on 31 March.
IR requires you to keep a logbook for 90 days every three years if you use your vehicle for both business and personal trips.
April Week 1
Accounts receivable – Send invoices to customers for all unbilled sales at 31 March.
If you use accounting software, check the total of your aged accounts receivable is the same as the total of accounts receivable in your accounting trial balance.
Customers deposits – Make a list of deposits at balance date for services and goods to be supplied in the next tax year.
Deposits received aren’t income until the year the services or goods are supplied.
Retentions – Make a list of retentions you invoiced to customers before 31 March but aren’t receivable till afterwards.
Retentions aren’t taxable until the year the retention period expires.
Accrued holiday pay
Print an accrued holiday pay at 31 March report from your payroll software. The report should show the holiday pay owed to each employee at 31 March.
Update accounts payable at 31 March in your accounting software or make a list of bills you owe if keeping paper records. You may need to update the list if late bills arrive afterwards.
If you use accounting software, check the total of your aged accounts payable is the same as the total of accounts payable in your accounting trial balance.
April Week 2
Look for credit notes issued to customers after 31 March but are related to sales before then. Make a note of them so you can reduce your taxable income.
File your return and pay your taxes on time. Don’t waste your hard earned cash on unnecessary penalties and interest.
Contact us if you need help or have any questions. That’s why we’re here.