It's only a matter of providing the right documentation and letting your accountant work their magic.
By the time your returns are due, you've had everything prepared for you, your tax obligations reviewed and you're ready for the new financial year.
But what goes on behind the curtain? Just like every magic trick has three parts, so too does the process a great accountant uses to add value.
In this article, we'll look at what an accountant does to ensure your end-of-year taxes are complete, compliant and optimised.
Like a magician sets the scene for their illusion, the first stage of an accountant's end-of-year tax process is all about preparation.
Your transactions from the financial year are held in your ledger, whether that's on Xero, MYOB or another accounting software. It’s likely transactions have been recorded incorrectly and money deposited in the wrong accounts. Assets and liabilities will also need to be reconciled. Your accountant will work through these accounts, untangling what's happened to tidy your records and make them meaningful.
The value added here is that you will be able to easily review your records and understand where your money has gone and how your business or investments are tracking.
A great accountant serves up tax compliance with a spark of magic.
"The magician takes the ordinary something and makes it do something extraordinary." - Christopher Priest
Step two of the end-of-year accounting process is all about turning tax obligations into opportunities. This starts with compliance. Your accountant will review the books, determining what you can claim, as well as what you can't. This keeps the Australian Taxation Office (ATO) from knocking on your door, but then goes a step further.
In preparing your tax returns, a great accountant will go beyond compliance and into optimisation. They will maximise your claims to minimise the amount of tax you pay, all while staying above board. For example, they might advise you negate tax on a business sale by reinvesting in another business.
The end of the financial year is an opportunity to look seriously at how your business is tracking. Take this chance to sit down with your accountant and discuss your goals. A great accountant doesn't just sign off the end of the year - they look forward to the next. This means forecasting how your business will perform in the new year and identifying upcoming opportunities to streamline and optimise your tax.
All of this goes beyond your transactions and looks closer at aspects like your business structure. Perhaps you and a partner are operating your small business as two individuals, when a company structure could afford you a lower tax rate.
There are countless hidden opportunities to leverage end-of-year tax returns in your favour - you only need the magic of an accountant to find them.
Get ahead this year and reach out to the VBA team for tax compliance, optimisation and a little bit of stardust.