As the financial year comes to a close, businesses must start preparing for a smooth transition into the new fiscal period. The EOFY introduces numerous responsibilities, tax duties, and financial factors that can heavily influence your business’s success. Business owners can seek help from small business accountants in Melbourne to handle tax matters.
What is the End of Financial Year (EOFY)?
The end of the financial year (EOFY) is a key event for both businesses and individuals, marking the conclusion of the financial year on June 30th and the start of a new one. During this time, companies must complete various accounting tasks, including preparing financial statements and filing tax returns.
EOFY also presents an opportunity for individuals to review their finances, make year-end contributions, and adjust their financial strategies. With many important financial decisions to be made, understanding the significance of EOFY and its potential impact on you or your business is crucial.
Additionally, it can be beneficial to consider using a professional bookkeeping service during this period. Hiring a bookkeeper in Melbourne helps ensure that your financial records are accurate and up to date, making the EOFY process more seamless and efficient. They can assist with reconciling accounts, organising financial documents, and preparing the necessary reports for tax filing.
Tax Return Lodgement Requirements for Your Business
Here are some tax return lodgment requirements that all types of businesses must meet:
- Sole Traders
If you run your business as a sole trader, you are required to submit a tax return, even if your income is below the tax-free threshold. This includes:
- The individual tax return, including the supplementary section
- The business and professional items scheduled for individuals
In your return, you need to report:
- Your business income, after deducting eligible business expenses
- Other income, such as salary and wages (from a payment summary or income statement), dividends, and rental income, after accounting for any deductions related to this income.
If you file through myTax, you must lodge it by 31 October. If you file through a registered tax agent, they will tell you the time when they will file your tax return.
- Partnerships
If you run your business as a partnership, the partnership files a partnership tax return, reporting the net income of the partnership. As an individual partner, you must report on your individual tax return:
- your share of any net income or loss of the partnership
- any assessable income, such as wages and salary, rental income, and dividends.
You need to lodge it by 31 October if you file a partnership tax return yourself. If you file through a registered tax agent, they will tell you the time when they will file your tax return.
- Companies
If you run your business as a company, you must file a company tax return. You can also contact tax accountants for your business accounting in Melbourne to ensure smooth tax return lodgment. The company must report its tax offsets, taxable income, and credits. If you file the company tax return yourself, you must check the due date. Usually, the date of lodgment and payment for small companies is 28 February. If you have previous year returns outstanding, then the due date will be October 31. If you file through a registered tax agent, they will tell you the time when they will file your tax return.
- Trusts and Beneficiaries
If you run a business through a trust:
- the trustee files a trust tax return
- each trust beneficiary files their own tax return, such as an individual or company tax return.
The trust records its net income or loss. This is the assessable income less deductions of a trust. If you file the trust tax return yourself, then the due date will be 31 October. If you file through a registered tax agent, they will tell you the time when they will file your tax return.
Conclusion
As the end of the financial year approaches, every business must be prepared with all documents and records to file tax returns on time to avoid penalties. You can also seek help from Reliable Melbourne Accountants to ensure a smooth EOFY.