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Top 5 Tips To Reduce Your Tax Bill

Published 20 Jun 2018

Author Erin Splatt

End of financial year is fast approaching. Whilst PTs can be brilliant at motivating people, getting training results and handling large client bases, often many of us are in the dark with regards to the tax side of our businesses! Our resident accountant Michelle Manion from Accounting for Fitness has put together her top EOFY tax tips – definitely worth checking out below. So be smart and make sure you don’t pay more tax than you have to this year:

  1. Record Keeping

The most important thing you can do is keep good records. Not only will it ensure you run an efficient business, keeping an electronic or written record is essential to ensuring you do not pay more in tax. A great habit is to ensure you never pay for any business expense with cash. Use a dedicated credit or debit card so that all of your transactions are recorded. This will ensure you have a written record from which to do your bookkeeping. Keeping track of your expenses as you incur them will make year-end bookkeeping much quicker and easier and ensure you claim all of your business deductions. It will also mean you do not stumble if asked by the Tax Office to verify any transactions.

2. Home Office Expenses

This deduction is available to self-employed trainers who uses part of their home as an office for activities such as writing PT programs, researching exercises or business admin tasks. The space does not have to be an entire room (a corner where you store your equipment or have a desk and files and your computer will suffice). You may be able to claim a deduction for occupancy expenses such as rent, council rates, house insurance etc AND running expenses such as electricity, telephone or the cost of home office equipment such as a new desk or printer.

3. Think about your Retirement

Many personal trainers are too busy taking care of their clients to ever think about retirement. But while most employees have some superannuation paid for them by their employer, we are in charge of ensuring our own Superannuation accounts stay topped up. It is important to remember that you are responsible for your own retirement. As an added bonus- superannuation contributions are tax deductible! Talk to your accountant before making these contributions as there are certain limits in place as to how much you can contribute. But this is a great way to save for your retirement whilst reducing your tax.

4. Instant Asset Write-Off

Small businesses can write off business assets purchased costing less than $20,000! How’s that  very expensive dumbbell looking?! A couple of tips to keep in mind

  • The asset must be installed and ready for use prior to 30 June to qualify this financial year.
  • Remember this is not a cash hand-out. You still have to pay for the asset!
  • Beware of private use! To claim the full deduction, the asset needs to used 100% for business use. If you use the asset part of the time for personal use, then you will need to pro-rata the deduction

5. Pre-Paid Expenses

A small business can get an immediate tax deduction for certain business expenses that they pre-pay before 30 June! If you pay for business expenses prior to 30 June such as insurance, rent, subscriptions or memberships that relates to the next financial year, you will be able to get a deduction in the current financial year.

Check your cashflow and see whether you can afford to pre-pay any of these expenses to bring forward the tax deduction. You may also be able to receive a discount from the supplier for paying upfront.

But her biggest tip of all: To get the best result on your tax bill- Seek Professional Help Save yourself time and hassle by hiring a professional. Use your precious time becoming the best trainer you can be and promoting your business.  With over 10 years of experience, Michelle can assist you with all of your Record Keeping and Tax needs. And even better- she’s also a qualified personal trainer and gym owner so she knows your business inside out and all the tips and tricks to get you the best tax result.

Check out her website,  email her (michelle@accountingforfitness.com.au)  or give her a call on 0408683407 to get your Tax Essentials sorted!

Disclaimer: This article contains general information only. No responsibility can be accepted for errors, omissions or possible misleading statements. No responsibility can be accepted for any action taken as a result of any information contained in this articles. It is not designed to be a substitute for professional advice and does not take into account your personal circumstances.