Tax time tips for small businesses

The ATO is reminding small businesses of things they can do to prepare for the financial year end.

As the new financial year begins, now is the ideal time for small business owners to review their systems, update records, and ensure they are set up for success in the year ahead.

The ATO has outlined key steps to help small businesses meet their obligations and take advantage of available concessions.

Set Up Online Services for Business

Ensure your business is registered with the ATO’s Online Services for Business platform. To access this service, you will need:

myGovID account - To link your identity to your business using Relationship Authorisation Manager (RAM). This will allow you to manage lodgements, access secure communications, and handle your business tax obligations online.

Declare All Income, Including Non-Cash Transactions

All forms of income must be declared — including goods or services received in exchange for work performed. These non-cash payments are still considered assessable income and must be reported in your tax return.

Understand Loss Rules

If you operate as a sole trader or are an individual partner in a partnership, be aware of the non-commercial loss rules. These determine whether you can offset your business losses against other income (such as salary or investment earnings). Eligibility must be assessed annually.

Separate Business and Private Use

Keeping your records accurate and complete is essential. Make sure to:

Separate business and personal expenses

- Clearly document any private use of business assets (e.g. vehicles, phones)

- Only claim the business portion of any shared expenses

Rules for Deductions

To validly claim a business deduction:

- The expense must be directly related to earning assessable income.

- If it is for both business and private use, only the business portion is deductible.

- You must keep records such as receipts or bank statements to substantiate the claim.

Choose the Right Accounting Method

Ensure you are using the correct accounting method for your business:

- Cash Basis: Report income when received and expenses when paid.

- Accruals Basis: Report income when earned and expenses when incurred, regardless of payment date.

The chosen method must be consistent and reflect the business’s true financial position.

Review Deductions and Concessions

Eligible small businesses may benefit from a range of deductions and concessions, including:

Simplified depreciation rules

- Immediate deduction for certain prepaid expenses

- Instant asset write-off for qualifying assets (subject to current thresholds and dates)

Review your eligibility and timing to maximise the benefit.

Start Strong This Financial Year

The financial year is the perfect time to take stock, refine your systems, and ensure your business is in the best position to thrive. By staying on top of your tax obligations early, you can avoid unnecessary stress and take full advantage of available opportunities.

For more information or personalised support, reach out to our team — we are here to help.

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